Global Stocks Surge as U.S. Clinches Stimulus Deal
25 März 2020 - 09:38AM
Dow Jones News
By Frances Yoon
U.S. futures rose, stock markets in Asia-Pacific and Europe
gained and the dollar weakened as lawmakers in Washington and the
Trump administration reached an agreement on an estimated $2
trillion stimulus package to limit the economic damage from the
coronavirus pandemic.
Futures for the S&P 500 and Dow Jones Industrial Average
rose, suggesting U.S. shares are likely to gain when the market
opens in New York. The WSJ Dollar Index declined about 0.5%, with
currencies including the Australian dollar, New Zealand dollar and
British pound strengthening against the greenback.
Indexes in Europe opened higher, with the pan-continental Stoxx
Europe 600 gaining 1.8% and the U.K.'s FTSE 100 rising 1.7%
Shares in Asia had risen earlier Wednesday following a surge in
U.S. indexes Tuesday as hopes built for a deal in Washington. They
extended those gains in the afternoon in Hong Kong after the White
House said an agreement had been struck.
Hong Kong's Hang Seng Index rose 2.7%. In Japan, the Nikkei 225
jumped 8% to close at its highest in more than two weeks, while
Australia's S&P/ASX 200 and South Korea's Kospi each rose more
than 5%.
"This is definitely a step in the right direction," said Paul
Sandhu, head of multi-assets quant solutions for Asia Pacific at
BNP Paribas Asset Management. "What we needed right away was an
economic buffer essentially stabilizing the downside risk for the
next three or four months while the virus hopefully starts to
dissipate."
Mr. Sandhu said he and his team would start to look for
investment opportunities but would be very focused on risk
management, given uncertainty over how much the novel coronavirus
has spread in the U.S.
Catherine Yeung, investment director at Fidelity International
in Hong Kong, said some investors in the region were buying stocks
for the first time in weeks.
However, Ms. Yeung characterized this as bargain-hunting, and
said markets could stay volatile as the pandemic continued to
spread globally. Confirmed cases world-wide passed 400,000
Tuesday.
"It's too early to tell whether we are on a path to recovery"
economically, she said. "What will be telling are the rescue
packages we see in the weeks and months [ahead] that will provide
unprecedented support for jobs and wages."
The Dow Jones Industrial Average soared 11% Tuesday, its biggest
one-day gain since 1933, and the S&P 500 closed 9.4%
higher.
The yield on the 10-year U.S. Treasury note rose to 0.849% from
0.813% Tuesday. Bond yields rise as prices fall.
Write to Frances Yoon at frances.yoon@wsj.com
(END) Dow Jones Newswires
March 25, 2020 04:23 ET (08:23 GMT)
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