Business Market 07 Apr 2020 Asian markets rise o ...

Asian markets rise on hopes of slowing coronavirus crisis

AFP | DECCAN CHRONICLE
Published Apr 7, 2020, 9:27 am IST
Updated Apr 7, 2020, 1:29 pm IST
 Asia markets extend gains on glimmers of hope in virus fight. (Photo- AFP)
  Asia markets extend gains on glimmers of hope in virus fight. (Photo- AFP)

HONG KONG: Equities rallied again Tuesday as investors seized on signs of a slowdown in the spread of the coronavirus in key hotspots and some governments began making plans to ease restrictions aimed at containing the disease.

Crude prices were also lifted by hopes major producers will agree to cut output this week, while the pound clawed back some of its losses that came in response to news Prime Minister Boris Johnson was in intensive care.

Asia extended Monday's rally following a surge on Wall Street, with much-needed optimism on news that fresh cases were slowing in Spain, Germany, Italy and France.

Tokyo and Shanghai stocks were both around two percent higher, while Hong Kong added 1.7 percent, and Seoul and Taipei each jumped 1.8 percent.

Mumbai soared six percent, while Singapore piled on more than three percent and Bangkok more than five percent.

Manila and Wellington also gained, though Sydney and Jakarta slipped.

In early trade, London jumped three percent, while Paris and Frankfurt were up a little more than three percent.

"Falling infection and death rates from COVID-19 in the worst of the European and US epicentres has inspired markets that the worst of the outbreak is peaking," said OANDA's Jeffrey Halley.

Adding to the positive vibe were further measures to support economies around the world, including a trillion-dollar package in Japan and central bank moves in China.

And with the ink barely dry on a $2 trillion rescue plan passed by Congress last month, Donald Trump said he favoured another massive spending programme again roughly $2 trillion this time targeting infrastructure projects.

EU leaders are also closing in on a rescue for nations worst hit in the region, according to sources, though not at the level called for by Italy and Spain.

The bloc's finance ministers will hold a videoconference Tuesday, when they are expected to agree to use the eurozone's $443-billion bailout fund. However, it is thought they will not act on a proposal to issue "coronabonds" that would pool borrowing among EU nations.

While the mood is a little better on trading floors, analysts remained cautious.

"Still, the market will need to come up for air, as for the real economy to recover the pace of play will be dictated more by (governments') willingness to relax social distancing measures, and the COVID-19 curve would probably need to flatten much more," said AxiCorp's Stephen Innes.

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