Asian stocks climb after Wall Street’s record rise on $2 trillion US stimulus
Asian stocks climbed again today as traders bet on even more economic stimulus to tackle the fallout from the coronavirus outbreak.
Japan’s Nikkei index surged 3.9 per cent overnight while Hong Kong’s Hang Seng index also climbed 0.6 per cent. MSCI’s broadest range of Asia-Pacific shares outside Japan gained 3.3 per cent.
Asian stocks posted rises despite woeful US unemployment data that showed a record jump to 3.3m claimants.
US stocks also posted massive gains yesterday. They overcame the jobless data as traders expected the government to move quickly to pass a $2 trillion economic stimulus measure.
The S&P 500 jumped 6.2 per cent, the Dow surged 6.4 per cent and the tech-heavy Nasdaq leapt 5.6 per cent. That saw Wall Street hit its best three-day run since the 1930s.
Congress’ House of Representatives could approve the package today. Doing so would flood the US economy with cash to counteract the ill effects of a lockdown on businesses.
US coronavirus cases outnumber China
It came as the US surpassed China’s total number of coronavirus cases to count almost 86,000. China, where the coronavirus outbreak began in January, has 82,000 and Italy has 82,500.
But Jasper Lawler, head of research at London Capital Group, warned the US hitting a new country high in its coronavirus caseload could dent hopes of a quick recovery.
“The US overtaking China in the number of coronavirus cases is causing some to second-guess recent optimism,” he said.
“European markets have a softer tone on Friday and there is slight haven bid with the Japanese yen moving higher and US Treasury yields lower.”
He warned President Donald Trump’s bid to kick start the US economy by Easter has led to caution, with current stimulus based on that goal.
“Either China’s numbers don’t tell the whole story and/or its harsher lockdown measures were more efficient,” Lawler said. “Both explanations lead us to fear the lockdowns in the West will extend beyond Easter, making the existing government support not be enough.”
That knock to optimism on the coronavirus crisis could push markets lower today. The FTSE 100 may open 123 points lower, Germany’s Dax could lose 114 points at the optn, and the S&P 500 could drop 38 points.