Hong Kong, Shanghai Markets Extend Rally

Hong Kong stocks rallied on Tuesday morning, extending a recovery from last week's losses, following a healthy lead from Wall Street with tech and energy firms leading the way.

The Hang Seng Index rose 1.5 percent, to 28,919 by the break.

On the mainland, the Shanghai Composite Index rose 1.6 percent, to 3,075, while the Shenzhen Composite Index soared 1.9 percent, to 1,700.

Tokyo's Nikkei went into the break 1.9 percent higher, while Sydney rose 0.3 percent, Singapore jumped 0.9 percent and Seoul added 0.8 percent. Taipei was more than one percent higher and Manila gained 0.6 percent.

The gains follow last week's sharp sell-off that was fuelled by worries over the global economy, with the OECD lowering its 2019 forecasts, the European Central Bank sounding a negative note on the eurozone's outlook and Chinese trade taking a hammering.

However, Oanda senior market analyst Jeffrey Halley warned that things could still turn ugly.

"Investors are clearly in an optimistic mood despite nothing having changed materially around the world. Investors should be cautious, however, because the rally is built on fragile foundations. It would be wise to stay nimble in a headline-driven market," he said in a note.

The pound extended its rally in Asian trade after British Prime Minister Theresa May hammered out a revision to her controversial Brexit deal she hopes will be enough to push through parliament.

The pound has risen about 1.5 percent against the US dollar since late Friday, while it is up around two percent on the euro. In Hong Kong, the Sterling was trading at HK$10.37. (AFP)

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