Asian Markets Surge After China Announces End of Quarantine for Incoming Travelers

Stocks in Asia rose after China announced that it will end its quarantine for inbound travelers on January 8. This symbolizes an end to the country's zero-Covid policy, which it has held for nearly three years.

The nation has downgraded Covid to a less strict Category B, health authorities said. Health officials are slated to hold a press briefing on Covid at 3 p.m. Beijing time.

The Shanghai Composite rose 0.98% to close at 3,095.57 on Christmas Eve, while the Shenzhen Component gained 1.16% to 11,106.50. Markets in Hong Kong, Australia and New Zealand were closed for the holiday.

In Japan, the Nikkei 225 rose 0.16% to 26,447.87 and the Topix gained 0.4% to 1,910.15 as the nation saw retail sales up for the 9th consecutive month. The main drivers of this growth were tourism and spending on essential goods. The Kospi in South Korea gained 0.68% to 2,332.79 and the Kosdaq climbed 1.37% 704.19.

Last week, Wall Street ended with some gains for the S&P and Nasdaq Composite, despite posting a weekly loss as recession fears continued to weigh on investor sentiment. The core personal consumption expenditures price index for November came in at 4.7%, slightly higher than expectations on an annualized basis.

The Australian and New Zealand dollars both strengthened on Tuesday as China’s health officials reaffirmed the country’s reopening measures. This news helped to boost investor confidence in the two currencies.

The Australian dollar strengthened against the U.S. dollar on Tuesday afternoon, rising 0.56% to 0.6766. The New Zealand dollar also strengthened against the greenback, rising 0.22% to 0.6309.

As of December 30, travelers visiting Japan from mainland China will be required to submit a negative Covid test upon arrival, Japanese Prime Minister Fumio Kishida told reporters on Tuesday.

Kishida stated that travelers from China who test positive will be required to quarantine for seven days, as reported by Reuters.

Japanese travel stocks continued to rise on Tuesday, with Japan Airlines up 2.2%, ANA Holdings up 1.45%, and H.I.S. up 1.94%. Online travel agency Airtrip also climbed 3.48% in Tokyo's afternoon session.

China's health authorities are set to hold a press conference at 3 p.m. local time, according to state media. This comes as the country continues to grapple with the outbreak of the novel coronavirus.

The briefing will cover newly introduced measures that have changed the designation of Covid-19 from a "Category B" virus to a "Category A" virus.

The new measures, announced on Monday, also said that China would scrap quarantine requirements for inbound travelers as of January 8, 2023.

The National Health Commission and the National Bureau of Disease Control and Prevention will be fielding questions from the public, according to an announcement.

After North Korean drones flew into South Korean air, shares of South Korean defense companies rose. This event showed the potential threat that North Korea poses to South Korea, and investors responded by buying up shares in companies that could help defend against such a threat.

South Korean President Yoon Suk-yeol has ordered the nation's military to establish a "drone unit," saying that national defense personnel have "lacked preparedness and training." In a statement on Tuesday, the president said that the new unit will help to improve the country's ability to respond to threats.

Firstec, a company that produces aerospace military weapons, saw its shares rise more than 17% in Tuesday afternoon trading. Hanwha Aerospace also rose 3.6%, Korea Aerospace rose 2.8%, and LIG Nex1 gained 3.55%.

Andy Lipow, President of Lipow Oil Associates, has warned that the severe winter snowstorm sweeping across the United States will have knock-on effects on the global energy market.

According to Lipow, the blizzard caused a 300,000 barrel per day reduction in crude oil production in North Dakota. Additionally, he stated that the cold weather phenomenon led to a 10-15% decline in natural gas production across the country.

According to Lipow, the increased exports of gasoline and diesel from the United States is likely to have an impact on global oil markets, particularly in Europe and South America.

He said that LNG exports to other countries have been hindered as a result of temporary shutdowns of some ports along the Texas Gulf Coast due to high winds.

Lipow stated that although weather is always a temporary issue, gasoline supplies are still in good condition.

Brent crude futures rose slightly to $84.42 a barrel, while West Texas Intermediate futures also rose slightly to $80.04 a barrel.

Japan's November unemployment rate was 2.5%, in line with expectations from analysts. This is a positive sign for the economy, as it indicates that businesses are hiring and people are finding work.

This month's reading marks a modest drop from October's reading of 2.6%.The jobs-to-applicants ratio in Japan for the month of January was 1.35, slightly missing estimates of 1.36. This is unchanged from the previous month, when the ratio saw the highest level of availability of jobs since March 2020.

James Morton, chief investment officer at Santa Lucia Asset Management, believes that investors who are planning to be underweight on China in 2023 are making the wrong decision.

Morton said on CNBC's "Squawk Box Asia" on Tuesday that he believes we are more overweight today than we have ever been, because we are more confident that this is the right call for 2023.

Covid cases are expected to rise in the next few months as China reopens, but corporate profits are expected to be significantly better year-on-year in the second quarter of 2023, he said.

According to data released by the Ministry of Economy, Trade and Industry, Japan’s retail sales grew 2.6% in November, marking the ninth month of growth. This is good news for the Japanese economy, which has been struggling in recent years.

The reading missed expectations for growth, according to economists polled by Reuters. This marks the slowest growth since July.

The government's decision to lift Covid border restrictions and provide a domestic travel subsidy has helped boost consumer demand, as the economy has unexpectedly contracted in its recovery from the pandemic.

This month, short sellers increased their bets against Tesla as the company's stock price fell by an additional 35%.

According to S3 Partners, more than 3% of Tesla shares currently trading are sold short. This is a bigger short bet than any other company, including Apple.

China's industrial profits continued to decline in November, falling 3.6% compared to the same period a year ago, according to data from the National Bureau of Statistics. This marks a further decline from the previous month, when profits fell 2.3%.

After five straight months of negative growth, November marked the worst performance since August 2020, when the economy shrank by 4.4%.

Chip stocks have been popular with investors in recent years, but this year they have sold off amid a flight to safety. Industry experts reveal what’s next for the sector and name their top stock picks.

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Stocks rose on Friday. The Dow Jones Industrial Average closed 176 points higher on Wednesday, led by gains in energy and financial stocks. The S&P 500 rose 0.6%, while the Nasdaq Composite added 0.2%.

The core personal consumption expenditures price index, the Federal Reserve’s preferred gauge of inflation, rose slightly more than economists expected on a year-over-year basis. This is a positive sign for the economy, as it indicates that prices are rising at a healthy pace.

The core personal consumption expenditures (PCE) index rose 4.7% in November from the previous year, in line with economists' expectations. Month-over-month, the index increased 0.2%, also matching forecasts.