“Forget the Vix. The Covid19 curve is the new risk barometer,” said Stephen Innes, chief global strategist at AxiCorp.

“Relaxing social distancing is the new ‘risk-on’ barometer’,” he wrote in his daily markets note. “Sentiment in markets continues to shift like a yo-yo, but signs that the coronavirus curve continues to flatten in the worst affected countries are very positive. Pretty much everywhere you look in financial markets, there is renewed optimism.”

The Hang Seng Index closed with a 1.4 per cent gain at 24,300.33. HSBC, Tencent and Macau casino stocks including Galaxy Entertainment and Sands China advanced.

“People are feeling optimistic,” Alan Li, portfolio manager at Atta Capital, said about Hong Kong stocks. “The Hang Seng Index has already formed a bottom around 21,100, and won’t go back again in the short term.”

The Easter holiday will mean no trading in Hong Kong on Friday and Monday nor any on the trading link between the city and the mainland known as the Stock Connect. China markets will be open both days.

The White House is weighing options to reopen the world’s largest economy that depend on testing more Americans for the coronavirus, Bloomberg reported, citing people familiar with the matter.

Widespread testing will likely begin in smaller cities in states that have not been hard hit by Covid-19 yet, while “hotspots” such as New York, Detroit, New Orleans would remain shuttered, it reported.

Meanwhile, Wuhan, the centre of the viral outbreak, lifted its 11-week lockdown on Wednesday, and tens of thousands of residents left the city for work in other areas to get their normal lives back on track. In a controversial move, Wuhan’s Huanan seafood market, which sold exotic animals and was tagged as the source of the rapidly spreading illness, reopened as well. Some European countries such as Austria are experimenting with restarting businesses.

Another driver of market sentiment is the meeting among OPEC and other major oil producers, scheduled for later today. Oil prices have plunged amid virus-dampened demand worsened by a Saudi-Russian price war.

Elsewhere in Asia, most equity benchmarks advanced.

In South Korea, the central bank left its key interest rate unchanged, as expected, holding the seven-day repurchase rate at 0.75 per cent. The Bank of Korea slashed its benchmark interest rate to a record low in an emergency move on March 16.

South Korea’s Kospi closed ahead by 1.6 per cent, while its tech-heavy Kosdaq rose 1.4 per cent.

In Japan, the Nikkei 225 was essentially flat, slipping 0.04 per cent. Sentiment remains positive overall, with the index having advanced the past four sessions as the government launched new measures to deal with the new coronavirus.

Prime Minister Shinzo Abe has declared a state of emergency in Tokyo, Osaka and five other prefectures – accounting for about 44 per cent of Japan’s population – to contain the outbreak. The government also approved a record near-US$1 trillion stimulus package for families and business. That is equivalent to 20 per cent of Japan’s GDP.

The coronavirus pandemic is having a “serious impact” on the Japanese economy and uncertainty over the country’s outlook is “extremely high”, Bank of Japan Governor Haruhiko Kuroda said on Thursday.

In Australia, which is reeling from its worst economy since the Great Depression, the ASX 200 rose 3.5 per cent.

New Zealand’s S&P/NZX50 slipped 0.7 per cent, after gaining 2.3 per cent gain on Wednesday.

Meanwhile, Singapore’s Straits Times Index rose 1.3 per cent.

Singapore banned public and private gatherings of any size, with the exception of family members or friends who live together, and shut all non-essential businesses in a bid to contain the coronavirus pandemic.

Additional reporting by Kathleen Mangramo