Global shares rise after surge in US on stimulus measures

TOKYO (AP) — Shares in Europe and Asia advanced yesterday, tracking an overnight surge on Wall Street as governments and central banks take more aggressive measures to fight the virus outbreak and its effects on the economy.

Benchmarks rose in almost every market, though the United States (US) futures pointed to a weak open.

France’s CAC 40 added 0.5 per cent in early trading to 5,490.52, while Germany’s DAX was up nearly 0.6 per cent to 12,194.33. Britain’s FTSE 100 inched up 0.2 per cent to 6,830.92.

US shares were set to drift lower with Dow futures dipping 0.9 per cent to 26,731. S&P 500 futures were down 0.9 per cent at 3,085.70.

The gains on Wall Street more than recouped big losses from a day earlier as wild, virus-fuelled swings around the world’s markets extend into a third week.

Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea yesterday. PHOTO: AP

Health care stocks led gains after former Vice President Joe Biden solidified his contender status for the Democratic presidential nomination. Investors see him as more business-friendly than Senator Bernie Sanders.

The rally’s momentum accelerated around midday after House and Senate leadership reached a deal on a bipartisan USD8.3 billion bill to battle the coronavirus outbreak. The measure’s funds would go toward research into a vaccine, improved tests and drugs to treat infected people.

The upward momentum carried into Asian trading, where Japan’s benchmark Nikkei 225 rose 1.1 per cent to finish at 21,329.12. Australia’s S&P/ASX 200 added 1.1 per cent to 6,395.70. South Korea’s Kospi gained 1.3 per cent to 2,085.26. Hong Kong’s Hang Seng added 2.1 per cent to 26,762.43, while the Shanghai Composite jumped 2.0 per cent to 3,071.68. India’s Sensex climbed 0.5 per cent to 38,593.25. Shares were also higher in Taiwan and Southeast Asia.

Shares in Chinese blue chips rose yesterday in Hong Kong, suggesting “investors’ confidence was restored by the surge in US markets. We don’t have the panic selling evident last week when the market fell sharply,” said Francis Lun, a stock analyst in Hong Kong.

“Despite the specter of coronavirus lurking over the world’s economy, all appears well with the world, judging by Wall Street’s overnight performance,” Jeffrey Halley of Oanda said in a commentary. “China’s rate of new infections has plunged, even as coronavirus makes its presence felt in the far-flung corners of the globe.”

Investors expect other central banks will follow up on the Federal Reserve’s surprise move Tuesday of slashing interest rates by half a percentage point in hopes of protecting the economy from the economic fallout of the new coronavirus.

Even though many investors say they know lower interest rates will not halt the spread of the virus, they want to see central banks and other authorities do what they can to lessen the damage.

The Bank of England has a meeting on March 26 on interest rates. The European Central Bank and others have already cut rates below zero, meanwhile, which limits their monetary policy firepower. But economists say they could make other moves, such as freeing up banks to lend more.

ENERGY

Benchmark crude oil rose 19 cents to USD46.97 per barrel in electronic trading on the New York Mercantile Exchange. It fell 40 cents to settle at
USD46.78 a barrel. Brent crude oil, the international standard, gained 25 cents to USD51.38 a barrel.

CURRENCIES

The dollar fell to JPY107.27 from JPY107.55 on Wednesday. The euro fell to USD1.1127 from USD1.1131.