SEOUL (BLOOMBERG) – Philippine and South Korean stocks entered technical bull markets on Monday (April 6), rising over 20 per cent from lows reached just weeks ago, as investor sentiment was buoyed by a slowing death toll in some of the world’s coronavirus hotspots.

Indonesian shares also flirted with bull territory, as Asia’s regional benchmark climbed 4.1 per cent. 

Australia’s benchmark index rose 4.3 per cent; Japan’s Nikkei added 4.2 per cent while Hong Kong’s Hang Seng index closed 2.2 per cent higher. Markets in mainland China were closed for a public holiday.

In Singapore, the Straits Times Index closed up 3.4 per cent. The government on Monday morning unveiled an unprecedented third round of Budget support measures to help tide the economy through the one month of Covid-19 “circuit breaker” distancing measures.

New York State fatalities fell for the first time, and Italy had the fewest deaths in more than two weeks. Futures on the S&P 500 Index jumped 3.6 per cent as of 6:32am New York time after US President Donald Trump said he sees signs the US outbreak is beginning to level off. Markets were also optimistic about Saudi Arabia, Russia and other large oil producers moving to negotiate a deal to stem a historic price crash.

In South Korea, the Kospi index gained 3.9 per cent to close 23 per cent above its March 19 low. Samsung Electronics was the biggest boost to the measure, rising 3.6 per cent ahead of its preliminary earnings report on Tuesday.

“While South Korea remains susceptible to implications of external weakness, the region had been seen as one ‘flattening the curve’ without taking more stringent and disruptive containment measures,” said Jingyi Pan, market strategist at IG Asia in Singapore. “Moving further down the Covid-19 curve, this had thereby seen improved sentiment for the country.”

The Philippine Stock Exchange Index rose 4.2 per cent on Monday, 20.5 per cent above an eight-year low set on March 19. The gains were helped by anticipation that a lockdown to contain the pandemic will be extended by two weeks, easing concerns of the quarantine being lifted prematurely.

“Improved global sentiment is the main catalyst and that’s driven by optimism Russia and OPEC will reach a deal cutting back production,” said Manny Cruz, strategist at Papa Securities. “The Philippines and Indonesia are leading the climb to bull territory for these were the hardest hit markets amid the virus sell-off.”

In Indonesia, the Jakarta Composite Index jumped by as much as 3.8 per cent, pushing its gain from its March 24 to more than 20 per cent, meeting the technical definition of a bull market. Some investors might be taking the depressed valuations and share prices as an opportunity to buy into the long-term prospects for the Southeast Asia’s biggest economy, according to Thendra Crisnanda, head of research at PT MNC Sekuritas.

“This roller-coaster ride of the Indonesian market has been amazing, although fundamentally this upswing cannot be explained with the companies facing downward earnings revisions this year,” Crisnanda said. “One possible explanation is if there are active funds who have conviction on the Indonesian market and are buying stocks on the dip.”

Indonesia has reported more than 2,000 confirmed cases of the coronavirus with a death toll of nearly 200, making it the country with highest fatalities in Asia after China. President Joko Widodo declared a national health emergency last week and ordered large scale social distancing to contain the spread of the virus that has killed more than 69,000 people worldwide and infected nearly 1.3 million. His administration has also introduced several measures to bolster the economy.

While strong, the gains could still prove to be merely relief rallies. The PSEi is still 33 per cent below its July 15 high. The JCI is 27 per cent off from its April 2019 peak, and the Kospi is still about 21 per cent down from its Jan 22 high.

“With a very light calendar globally today, there is enough momentum to keep the equity rally running through the course of the day and also into European time,” Jeffrey Halley, senior market analyst at Oanda Asia Pacific, wrote in a note. “All bets are off after that although I could see a couple of days of positive sentiment ahead, especially if those mortality rates keep falling.”