103rd Day Of Lockdown

Maharashtra2000641080828671 Tamil Nadu107001605921450 Delhi97200682563004 Gujarat35398254141926 Uttar Pradesh2655418154773 Telangana2231211537288 Karnataka215499246335 West Bengal2123114166736 Rajasthan1953215640447 Andhra Pradesh176998008218 Haryana1654812257260 Madhya Pradesh1460411234598 Bihar11457848888 Assam9800632814 Jammu and Kashmir82465143127 Odisha7316535333 Punjab56683989149 Kerala4594243626 Chhatisgarh3065241414 Uttarakhand2791190937 Jharkhand2339160512 Tripura140110931 Manipur13166390 Goa11984783 Himachal Pradesh9796179 Puducherry73930112 Nagaland5351820 Chandigarh4593956 Arunachal Pradesh252751 Mizoram1601230 Sikkim101520 Meghalaya50421
Business Market 16 Jun 2020 Asian shares jump as ...

Asian shares jump as Federal Reserve starts corporate bond buying programme

Published Jun 16, 2020, 8:39 am IST
Updated Jun 16, 2020, 8:44 am IST
Global equities fallen sharply from late last week due to worries about US economy and confirmation of new coronavirus cluster in Beijing
Asian shares jump, yields rise as Fed readies corp bond buying. (AFP Photo)
 Asian shares jump, yields rise as Fed readies corp bond buying. (AFP Photo)

TOKYO: Asian shares and Wall Street futures rallied on Tuesday as the formal start of the Federal Reserve’s corporate bond buying programme boosted global investor sentiment and calmed earlier worries about a second wave of coronavirus infections.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 2.2%, its biggest one-day gain since June 1. Australian stocks rose 3.0%, while shares in China rose 1.2%.


U.S. stock futures, the S&P 500 e-minis, were up 0.98% following a late rally on Wall Street on Monday. Treasury yields rose and the yield curve steepened.

The Fed said it will start purchasing corporate bonds on Tuesday in the secondary market, one of several emergency facilities launched in the wake of the coronavirus pandemic.

Global equities had fallen sharply from late last week due to worries about the U.S. economy and confirmation of a new coronavirus cluster in Beijing.

However, the Fed’s corporate bond purchases and data showing new infections in Beijing are under control helped equities quickly reverse course and head higher.

“Equities were overbought and corrected lower, but the S&P 500 has bounced off support because of the Fed,” said Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors in Sydney.

“The markets will continue to go higher a long as economies continue to reopen and as long as the number of coronavirus cases is not large enough to stop the reopening.”

Sentiment in Asia got a further boost after health officials said there were 27 new coronavirus cases in Beijing, down from 36 new cases the previous day.

Japan’s Nikkei stock index and shares in South Korea were both on course for their biggest daily gain in two months.

The Australian dollar rose 0.31% to $0.6942. The Aussie is often traded as a liquid proxy for risk because of its close ties to China’s economy and global commodities.

The yen was little changed at 107.32 per dollar before a Bank of Japan meeting ending later on Tuesday.

No major policy moves are expected, but some investors will focus on any comments about the global debate on capping government bond yields.

The Fed on Monday also announced eagerly-awaited details of its programme to lend funds directly to companies.

Benchmark 10-year Treasury yields notes edged up to 0.7363%, while the spread between two-year and 10-year yields widened to 54 basis points in a sign of improving risk appetite.

Crude oil futures erased gains and fell amid persistent doubts over whether supply cuts would be enough to reduce an oil glut.

U.S. crude fell 1.2% to $36.68 a barrel. Brent crude declined by 1.2% to $39.23 per barrel.

Location: Japan, Tokyo-to, Tokyo