Currency trader watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, April 3, 2020. (AHN YOUNG-JOON / AP)

South Korean, Philippine and Indonesian stocks are the first in Asia Pacific to enter technical bull markets, rising over 20 percent from lows reached just weeks ago, as investor sentiment was buoyed by a slowing death toll in some of the world’s coronavirus hotspots.

Asia’s regional benchmark climbed 2.5 percent, the most in about two weeks. New York State fatalities fell for the first time, and Italy had the fewest deaths in more than two weeks. 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.

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 

Jingyi Pan, market strategist at IG Asia Pte. in Singapore

In South Korea, the Kospi index gained 3.9 percent to close 23 percent above its March 19 low. Samsung Electronics Co. was the biggest boost to the measure, rising 3.6 percent 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 Pte. 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 percent on Monday, 20.5 percent 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 4.1 percent, pushing its gain from March 24 to 22 percent, 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.

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“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 percent below its July 15 high. The JCI is 27 percent off from its Feburary 2019 peak, and the Kospi is still about 21 percent down from its Jan 22 high.

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“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 Pte., 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.”