US futures rise and Hong Kong stocks jump 5% after China's vaccination move boosts hopes for a zero-COVID pivot

George Glover
Updated ·2 min read
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China zero-COVID
China said it will boost vaccination rates for elderly citizens.Kevin Frayer/Getty Images

  • Hong Kong stocks soared and US futures rose Tuesday, after logging big losses the previous session.

  • Recent public protests in China over strict zero-COVID curbs threatened to worsen supply chain issues.

  • China said Tuesday it will boost vaccination for elderly citizens, a key step to reopening its economy.

Global stocks jumped Tuesday after Chinese authorities said it's launching a drive to boost vaccination rates among its elderly citizens, lifting hopes that Beijing is looking to pivot away from Beijing's tough zero-COVID stance.

US stocks gained in premarket trading, with S&P 500 futures rising 0.11%, Nasdaq futures up 0.27% and Dow Jones Industrial Average futures 0.48% higher.

Hong Kong's Hang Seng jumped 5.24% on expectations China could ease its zero-COVID policies, while the mainland Shanghai Composite climbed 2.31%. But Tokyo's Nikkei 225 closed 0.48% lower.

Protests in Beijing and Shanghai over anti-COVID restrictions weighed on US stocks Monday, with all major markets closing down around 1.5% on worries about a potential hit to the world's second-biggest economy. Experts said the unrest threatened to worsen supply-chain issues and in turn fuel higher US inflation.

In response, Beijing said it will provide its elderly population with COVID-19 booster shots – which health experts see as key to any potential economic reopening.

Stocks are also benefiting from expectations that Federal Reserve chair Jerome Powell will signal that the US central bank will start raising interest rates more gradually from December, in a speech he is set to make Wednesday.

Asian stocks' strong performance lifted global equities, with the MSCI World Index up 0.02% at last check.

Europe's flagship Stoxx 600 stock index was broadly flat. London's FTSE 100 rose 0.71%, while Paris's CAC 40  and Frankfurt's DAX 40 both wavered around the flatline.

Here's how other major assets are performing this morning:

  • Oil prices climbed on bets that any Chinese economic reopening would boost demand. Brent crude rose 2.4% to $86.02 a barrel, while WTI crude rallied 2.3% to $79.05 a barrel.

  • The US Dollar Index, which measures the greenback's strength against a basket of six other currencies, fell 0.4% to 106.25.

  • Expectations of a zero-COVID pivot helped China's less tightly-managed offshore yuan gain 0.9% to 7.18 yuan per dollar.

  • Global bonds signaled a recession, as 10-year yields fell below one-to-three year yields for the first time in at least two decades.

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