Global stocks surge after Trump acquitted, China virus aid

AP – Global stock markets surged yesterday after United States (US) President Donald Trump was acquitted in an impeachment trial and China announced a tariff cut on US imports and aid to businesses reeling from a virus outbreak.

London and Frankfurt opened higher, while Tokyo, Hong Kong and Seoul rose more than two per cent.

Markets were also boosted by strong US corporate earnings. That helped to dampen fears about the impact of sweeping Chinese efforts to contain a viral disease that closed factories, restaurants and shops as the death toll rose.

“The markets are not only holding up, but they’re going up!” said Stephen Innes of AxiCorp in a report. “To suggest risk appetite continues to ‘creep’ back in favour might be the biggest understatement of the week.”

Trump was acquitted after a rare trial before the US Senate on charges of abuse of office following accusations he pressured Ukraine to investigate Joe Biden, a potential rival in this year’s presidential election.

Meanwhile, Chinese state TV said the government will cut value-added taxes and offer low-interest loans to help businesses weather a downturn caused by anti-virus measures that have depressed travel, retail sales and other industries.

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

Thailand’s central bank cut its benchmark lending rate this week to help the country weather the loss of Chinese tourists. Brazil, a supplier of iron ore, soybeans and other commodities to China, also announced a rate cut.

In early trading, London’s FTSE 100 advanced 0.4 per cent to 7,509.67 and Frankfurt’s DAX gained 0.7 per cent to 13,567.68. France’s CAC 40 added 0.7 per cent to 6,030.57.

On Wall Street, the future for the benchmark S&P 500 index was up 0.5 per cent and that for the Dow Jones Industrial Average gained 0.6 per cent. On Wednesday, the S&P 500 rose 1.1 per cent to a record and the Dow climbed 1.7 per cent. The Nasdaq composite gained 0.4 per cent.

In Asia yesterday, Tokyo’s Nikkei 225 jumped 2.4 per cent to 23,873.59 and Hong Kong’s Hang Seng gained 2.6 per cent to 27,493.70. South Korea’s Kospi rallied 2.9 per cent to 2,227.94.

The Shanghai Composite Index gained 1.7 per cent to 2,866.51.

Sydney’s S&P-ASX 200 added one per cent to 7,049.20 and benchmarks in Taiwan, New Zealand and most of Southeast Asia also advanced.

The impact of China’s anti-virus measures on the second-largest global economy is unclear. Many stores, restaurants and cinemas are closed in an effort to reduce the risk the infection might spread. Companies are warning of lower revenue and profit.

Tesla Inc plunged 17.2 per cent on reports production at its Shanghai factory will be delayed. The company warned investors last week delays were possible.

Investors got encouraging news about the US economy when payroll processor ADP said on Wednesday private US companies added 291,000 jobs in January, a big increase from December.

The Institute for Supply Management said its index of business activity by service sector companies increased in January, an indicator of economic expansion.


Benchmark US crude rose 59 cents to USD51.35 per barrel in electronic trading on the New York Mercantile Exchange. The contract advanced USD1.14 on Wednesday to close at USD50.75. Brent crude, used to price international oils, gained 33 cents to USD55.61 per barrel in London. It added USD1.32 the previous session to USD55.28.


The dollar advanced to JPY109.85 from Wednesday’s JPY109.82. The euro rose to USD1.1009 from USD1.0998.