GLOBAL MARKETS-Asia shares hit 7-week high, oil rallies as economies slowly re-open

By Swati Pandey
SYDNEY, April 29 (Reuters) - Asian shares climbed to a near
two-month peak on Wednesday as investors took heart from easing
coronavirus lockdowns in some parts of the world,
better-than-expected corporate earnings and a welcome rebound in
oil prices.
Futures pointed to a strong start for Europe and Wall Street
with E-Minis for the S&P 500 ESc1 up more than 1% helped by
forecast beating revenues from Alphabet Inc's Google GOOGL.O .
Eurostoxx 50 futures STXEc1 added 0.4% while futures for
Germany's Dax index FDXc1 and those for London's FTSE FFIc1
were each 0.7% higher.
Risk assets including equities have rallied for most of this
month thanks to heavy doses of fiscal and monetary policy
stimulus around the globe aimed at softening the economic blow
from the COVID-19 pandemic.
Positive news around potential treatments for the infection
as well as progress in developing a vaccine have also boosted
sentiment recently.
Moreover, investors are growing confident the infection may
be peaking as parts of the United States, Europe and Australia
gradually ease restrictions while New Zealand this week allowed
some businesses to re-open.
Hopes the moves would help revive demand sent U.S. crude
futures CLc1 up about 11% to $13.66 a barrel, paring a 27%
plunge over the first two days of this week. O/R
Brent crude LCOc1 futures rose 3.6% to $21.20 a barrel.
In equities, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS lifted 0.7%, having rallied 3.3%
already this week. It hit a high of 471.86 earlier in the day, a
level not seen since March 12.
Japan's markets were closed for a public holiday.
Australian shares .AXJO provisionally closed 1.2% higher
led by energy and resources firms while South Korea .KS11
added 0.8%.
Chinese markets opened in the black with the blue-chip index
.CSI300 up 0.2%.
All the same, analysts were circumspect about the rally.
"The recovery in global share prices from the March lows has
not been accompanied by an expansion in market breadth," said
Jefferies analyst Sean Darby.
Darby said the number of stocks above their 260-day moving
average was still very low across emerging market and developed
market indexes while the number of stocks making new highs
versus new lows is about equal.
"Unlike turning points for markets and earnings at the
bottom, there is no clear evidence on how the technical picture
should evolve. The current rally suggests that conviction levels
are low in our view," Darby added.
The equity gains have come even as analysts predict a sharp
contraction in world growth.
Moody's expects economies of the group of 20 advanced
nations (G-20) to shrink 5.8% this year with momentum unlikely
to recover to pre-coronavirus levels even in 2021.
Markets were next looking for any guidance from the U.S.
Federal Reserve, which is due to issue a policy statement at the
close of its two-day meeting on Wednesday. The European Central
Bank meets on Thursday. Analysts said it was unlikely the Fed would make further
major policy moves, given the scope and depth of its efforts to
counter the economic damage caused by the coronavirus.
On Wall Street overnight, investors dumped tech giants,
driving all three major U.S. stock indexes into the red.
The Dow Jones Industrial Average .DJI fell 0.3%, the S&P
500 .SPX lost 0.5% and the tech-heavy Nasdaq Composite .IXIC
dropped 1.4%.
Investors are now watching out for results from the other
major tech firms including Amazon AMZN.O and Apple AAPL.O .
Earnings from Facebook FB.O and Microsoft Corp MSFT.O are
due later in the day.
"There was a big sector rotation as money left high value,
growth sectors in tech like Amazon and went to value and
cyclical sectors like energy, industrial, financials," said Tim
Ghriskey, chief investment strategist at Inverness Counsel in
New York.
In currencies, the dollar weakened against the Japanese yen
to 106.52 on concerns the coronavirus could spread further than
previously thought if businesses reopened prematurely. JPY=
The euro EUR= was up 0.3% at $1.0852 though the euro index
=EUR eased after Fitch cut Italy's credit rating to BBB-, just
one notch above "junk" status.
The dollar index =USD against a basket of currencies fell
0.2%.

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