BEIJING The Asian stock markets were mostly higher on Wednesday after the sinking of Wall Street despite a drop in interest in the United States aimed at defusing fears that a virus epidemic would depress global economic activity.
The benchmarks for Shanghai, Tokyo and Seoul increased while Hong Kong and Sydney fell.
On Wall Street, the S&P 500 benchmark fell 2.8% on Tuesday despite the surprising 0.5% drop in federal reserves. It was the eighth daily drop in the indices in nine days.
China, Australia and other central banks have also lowered their rates to support economic growth in the face of anti-virus scans that disrupt trade and manufacturing. But economists warn that while cheaper credits can encourage consumers, rate cuts cannot reopen factories closed due to quarantines or a lack of raw materials.
Despite the Fed's rate cuts to support the US market, fear had clearly returned to reign in the markets, said Jingyi Pan of IG in a report.
More cuts could provide limited support, wrote Pan. Besides vaccines, there may not be a quick and easy solution to alleviate the shock of global markets.
Also on Tuesday, the Group of Seven Large Industrialized Countries pledged to support the global economy but did not announce any specific measures.
The Shanghai Composite Index
SHCOMP, + 0.06%
gained 0.1% and Tokyos Nikkei 225
NIK + 0.55%
increased by 0.3%. The Kospi
180721, + 2.09%
in Seoul gained 2.1%.
Hong Kongs Hang Seng
HSI, + 0.09%
down 0.1% while the S & P / ASX 200
XJO, -1.51%
in Sydney fell 1.2%. Singapore
ITS -0.01%
decreased while New Zealand
NZ50GR, + 0.33%
, Indonesia
JAKIDX, + 1.95%
and Malaysia
FBMKLCI, + 0.36%
Pink.
Another sign of caution from American investors, the 10-year Treasury yield fell below 1% for the first time in history. A lower yield indicates the difference between the market price and what investors will receive if they hold the bond until maturity, which indicates that traders are transforming the bond. money in bonds as a safe haven for the sake of the economic outlook.
On Wall Street, the S&P 500 index
SPX, -2.81%
declined to 3,003.37. Dow Jones industrial average
DJIA, -2.94%
fell 2.9% to 25,917.41. The Nasdaq composite
COMP -2.99%
fell 3% to 8,684.09.
US markets have fallen 11% since creating a record two weeks ago.
Federal Reserve Chairman Jerome Powell has recognized that the ultimate solution to the challenge of the virus will have to come from health and other experts, not from central banks.
The Fed has a long history coming to the rescue of markets with lower rates and other stimulus packages, which has helped this bull market in US stocks become the longest on record.
On Monday, the Dow Jones recorded its largest daily gain in more than a decade thanks to growing anticipation of coordinated support from the Fed and other central banks. Even before Tuesday's announcement, traders were confident that the Fed would cut rates by half a percentage point on March 18 at its next meeting.
The rate cut in the United States has been for the first time federal authorities outside of a regular meeting since the global crisis of 2008. This has prompted some traders to think that the Fed could predict an even more economic impact important than the markets fear.
American crude oil reference
CLJ20, + 1.50%
gained 61 cents to $ 47.79 a barrel in ecommerce on the New York Mercantile Exchange. The contract rose 43 cents Tuesday to close at $ 47.18. Brent crude
BRNK20, + 1.48%
, used for the price of international oils, added 64 cents to $ 52.50 a barrel in London. It fell 4 cents the previous session to close at $ 51.86 a barrel.
The dollar
USDJPY, + 0.28%
earned 107.30 yen from Tuesday 107.24 yen.
