TOKYO's Asian stocks rose on Thursday, inspired by a surge on Wall Street, as governments and central banks took more aggressive steps to tackle the virus epidemic and its effects on the economy.
The Japanese reference Nikkei 225
NIK, + 1.06%
+ 0.9% at the start of the session and Australias S & P / ASX 200
XJO, + 1.11%
added 1%. South Korea Kospi
180721, + 1.15%
gained 0.7%. Hong Kongs Hang Seng
HSI, + 1.93%
increased 1.2%, while the Shanghai Composite
SHCOMP, + 1.85%
was also up 1.2%. The shares were also higher in Southeast Asia.
The gains on Wall Street more than made up for the large losses a day earlier as wild and virus-fueled swings around world markets continue into a third week.
Shares have risen sharply from the start, driven by big gains for health care stocks after Joe Biden solidified his status as a Democratic presidential nomination candidate. Investors see it as a more business-friendly alternative than Bernie Sanders.
The rally momentum gathered momentum around noon after House and Senate leaders reached an agreement on an $ 8.3 billion bipartisan bill to fight the epidemic. of coronavirus. The funds for measures would go towards finding a vaccine, improving tests and medicines to treat infected people.
Investors also predict that other central banks will follow the Federal Reserve's surprise decision to cut interest rates by half a percentage point on Tuesday in the hope of protecting the 39; economics of the economic benefits of the new coronavirus. The central bank of Canada cut rates Wednesday, also by half a percentage point and citing the effect of the virus.
The fact that you get an $ 8 billion bill is money that will be spent, hopefully, on something that will really have an impact on mitigating the effects on Economics, said Tom Martin, senior portfolio manager at Globalt Investments.
Certain measures of fear in the market have eased. Treasury bill yields rose, but were still near record lows, a sign that the bond market remains concerned about the possible economic pain of the rapidly spreading virus. Companies around the world are already saying the virus is sapping profits due to lower supply chain disruptions and sales, with General Electric
GE, + 0.64%
become the last to warn its investors.
Even though many investors say they know lower interest rates won't stop the spread of the virus, they want central banks and other authorities to do what they do. 39; they can to mitigate the damage. The S&P 500 fell 2.8% on Tuesday after a brief recovery of relief triggered by the drop in the Feds rate.
Monetary policy can only get us here, but at least it's a step, said Jack Ablin, chief investment officer at Cresset. Investors will be reassured by coordinated action by the central bank. I am reassured to know that it is not the plague, finally end up going through there.
The Bank of England meets on March 26 on interest rates. The European Central Bank and others have already lowered their rates below zero, which limits the firepower of their monetary policy. But economists say they could take other measures, such as freeing the banks to lend more.
A market fear indicator, which measures how much traders pay to protect themselves from future fluctuations in the S&P 500, fell 14.1%.
Indices surged on Monday, and the Dow had its best day in more than a decade due to growing anticipation of coordinated support from the Fed and other central banks. This follows a dismal week that canceled out the gains for 2020.
The S&P 500
SPX, + 4.22%
up 126.75 points, or 4.2%, to 3,130.12. The benchmark has had five days in the past two weeks where it has swung more than 3%. Last year, there was only one.
The Dow
DJIA, + 4.53%
gained 1,173.45 points to 27,090.86. Nasdaq
COMP + 3.85%
rose 334 points, or 3.8%, to 9,018.09. The index, which is heavily weighted with tech companies, is now posting a slight gain for the year.
Reference crude oil
CLJ20, + 1.54%
increased 66 cents to $ 47.44 per barrel. It fell 40 cents to $ 46.78 a barrel. Brent crude oil
BRNK20, + 1.68%
, the international standard, gained 80 cents to $ 51.93 per barrel.
The dollar
USDJPY, -0.09%
fell to 107.36 Japanese yen from 107.55 yen on Wednesday.
