Asian shares turn higher as China rallies

Asian shares turned higher on Tuesday, reversing earlier losses on the back of gains in Hong Kong and China, while the dollar extended highs scaled in holiday-thinned trading in the previous session.

European shares marked a weak finish in thin trade on Monday, with many markets in the region closed for holidays. US markets were also closed for Memorial Day.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5%, after eking out a late gain in the previous session. Australian shares were up 0.8%.

Hong Kong’s Hang Seng index jumped 1.5%, flirting with seven-year highs, on expectations of more money inflows from the mainland following Beijing’s fresh moves to expedite cross-border investment. Mainland bourses also rose, with the CSI300 Index adding 0.9% and the Shanghai Composite Index rising 1.1%, both to fresh seven-year highs

China announced over the weekend that it would allow funds domiciled in Hong Kong and China to be sold in each others’ market starting July 1, in Beijing’s latest step to facilitate cross-border investment.

Japan’s Nikkei stock index was nearly flat, taking a breather after a run of seven straight gains and closing at a fresh 15-year high on Monday.