Asian shares gain on hopes for recovery, despite outbreaks

TOKYO (AP) — Shares rose in Asia on Monday, cheered by upbeat projections for a global economic rebound that were tempered by worries over expanding coronavirus outbreaks.

Investors were looking ahead to the release of China's economic growth data for April-June, a key indicator for trade, manufacturing and investments with implications for the entire region. Singapore is also releasing GDP data.

Japan's benchmark Nikkei 225 climbed 2.2% to finish at 22,784.74. South Korea's Kospi gained 1.8% to 2,188.06. Australia's S&P/ASX 200 added nearly 1.0% to 5,977.50. Hong Kong's Hang Seng rose 0.7% to 25,914.17, while the Shanghai Composite was up 1.3% at 3,426.87.

Shares also rose in India, Taiwan and Southeast Asia, apart from Singapore.

Stocks rallied Friday on Wall Street at the end of a week of volatile trading amid worries that rising coronavirus counts may halt the recent upswing in share prices.

While investors are hoping for an improved outlook thanks to the reopening of the Chinese economy following its own early outbreaks, share prices are much higher than justified by the numbers, analysts said.

“I do not think there will be any way to sugar-coat a disastrous Q2," said Stephen Innes of AxiCorp. “Still, I am not sure how significant the numbers will be given the premise that investors are paying a top premium for technology stocks based on 2021 rebound earnings."

On top of central bank policy meetings in Japan and elsewhere, corporate earnings are looming.

“According to FactSet, the estimated earnings decline for the S&P 500 index sits at -44.6%, representing a whole different world compared to the S&P 500 index that is approximately 6% away from its previous all time," said Jingyi Pan of IG.

“Reconciliation between the two could take place...