Asia's Fall a Distant Memory

Asia's asset managers and analysts are abandoning previously gloomy outlooks as springtime is producing an unexpected blossoming of regional equity prices.

After Monday's gains, Japan's Nikkei has jumped nearly 2% so far in April while Hong Kong's Hang Seng has risen 4.8% and is now less than 1% away from its all-time high of 20,950, set on Jan. 24. China's Shanghai Composite Index has been the biggest gainer of all, surging 13% so far this month, and is now up 31.5% from its low on Feb. 27, when the market plummeted 9% in a day. On Monday, the Shanghai Composite Index closed up 2.2% at an all-time high of 3,596.44.

"We're still in a zone of loose monetary policy, so equity markets will remain reasonably buoyant" for the time being, says Sean Darby, head of Asia strategy for Nomura Bank in Hong Kong.

Since February, no amount of negative news has been able to hold back Asia's markets, including fears of further interest rate hikes in Japan and recent hikes in China. For example, China's domestic markets surged again Monday even as the People's Bank of China's 50 basis-point hike in reserve requirements took effect. The reserve requirement ratio is the level of funds the bank is required to hold against interest liabilities, and a hike in the ratio is generally seen as a negative factor for markets.