Asia consolidates recent gains

Asian stocks held ground on Tuesday though Chinese equities surged to a fresh two-and-a-half month high as domestic funds piled into financial counters on expectations that the world’s second biggest economy may have turned a corner. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.2% on Tuesday and held below a 19-month peak hit last Thursday.

HONG KONG — Asian stocks held ground on Tuesday though Chinese equities surged to a fresh two-and-a-half month high as domestic funds piled into financial counters on expectations that the world’s second biggest economy may have turned a corner.

MSCI’s broadest index of AsiaPacific shares outside Japan was up 0.20% on Tuesday and held below a 19- month peak hit last Thursday.

The index is up more than 11% since Dec. 23, which marked the trough in a selloff triggered by Donald J. Trump’s surprise November win at the US presidential election.

With US markets closed for the Presidents Holiday on Monday, Asian markets have had few global cues off which to trade. European markets are broadly expected to follow in Asia’s wake and seen drifting in a narrow band. Chinese stocks led regional gainers with mainland indices extending a nearly 7% rise over the last month thanks to an influx of fresh funds from domestic institutional investors and a brightening outlook for the domestic economy.

“We upgraded our China equities call last month because of the strong economic data and comments coming out from the new US administration pointing to a softer stance towards China,” said Francis Cheung, head of ChinaHong Kong strategy at CLSA.

Despite the bounce in mainland stocks, valuations remained broadly middle of the pack in Asia with price-to-earnings multiples for Chinese stocks at 19.7, far below Australia’s and India’s at 25 and 23, respectively.

In currency markets, the euro nursed overnight losses as concerns about the looming French polls rattled the currency region’s bonds. The euro declined to $1.0581 and has fallen nearly 2% so far this month. Political worries have been front and center of investors’ minds over the past week or so, with markets wary about the outcome of the French elections in the wake of Brexit. The premium investors demand to hold French bonds instead of German debt rose to its highest since late 2012 after a poll showed the far-right Marine Le Pen narrowing the gap with centrist opponents. —