Left Menu
Development News Edition

GLOBAL MARKETS-Asia shares rise on more stimulus hopes but dollar loses steam

Reuters | Updated: 27-03-2020 11:29 IST | Created: 27-03-2020 11:00 IST
GLOBAL MARKETS-Asia shares rise on more stimulus hopes but dollar loses steam
Representative Image Image Credit: ANI

Asian stocks rose on Friday as investors wagered policymakers will roll out more stimulus measures to combat the coronavirus pandemic after U.S. unemployment filings surged to a record. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8%. Australian shares gave up gains to fall 4.55% after a strong week, but Japan's Nikkei rose 1.92%.

E-Mini futures for the S&P 500 reversed course and fell 1.58% in Asia following three consecutive days of gains in the S&P 500 on Wall Street. Pan-regional Euro Stoxx 50 futures were down 1.41%, German DAX futures fell 1.38%, and FTSE futures were down 2.21%, suggesting gains in Asian shares will not carry over into Europe.

The dollar fell against major currencies as central banks' steps to solve a dollar shortage in funding markets started to gain traction. The U.S. House of Representatives is expected to pass a $2.2 trillion stimulus package that will flood the world's largest economy with money to stem the damage caused by the pandemic.

The U.S. Federal Reserve has already slashed rates to zero and launched quantitative easing. The Fed will also take the unprecedented step of offering a direct backstop for corporate loans. The United States is now the country with the most coronavirus cases, surpassing even China, where the flu-like illness first emerged late last year. Policymakers may need to offer more stimulus as the virus slams the brakes on economic activity and increases healthcare spending.

"I'm not sure what measures are left, but the reaction in stocks shows some people hoping for more stimulus thought the market was a little oversold," said Yukio Ishizuki, FX strategist at Daiwa Securities in Tokyo. "Currencies tell a different story. The dollar is the lead actor. The mad rush to buy dollars due to liquidity concerns is starting to fade."

The number of Americans filing claims for unemployment benefits surged to a record of more than 3 million last week as strict measures to contain the virus pandemic ground the country to a sudden halt, data showed on Thursday. The jobless blowout was announced shortly after Fed Chairman Jerome Powell said the United States "may well be in recession", an unusual acknowledgment by a Fed chair that the economy may be contracting even before data confirms it.

Global equity markets took the data in their stride, partly as most central banks have already aggressively eased policy and governments are backing this up with big fiscal spending. Chinese shares, battered this month because of the virus, rose 1.6% on Friday. Shares in South Korea, another country hit hard by the pandemic, rose 0.42%.

Leaders of the Group of 20 major economies pledged on Thursday to inject over $5 trillion into the global economy to limit job and income losses from the coronavirus.

CURRENCY MARKET

In the currency market, the greenback fell 1.16% to 108.34 yen in Asia, on pace for a 2.2% weekly decline. The dollar was also headed for steep weekly declines against the Swiss franc, pound, and euro.

The U.S. currency's fall after two weeks of gains suggests the Fed's efforts to relieve a crunch in the dollar funding market are working, some analysts said. The yield on benchmark 10-year Treasury notes fell in Asia to 0.7979%, while the two-year yield edged up to 0.2829%.

Yields were headed for a weekly decline, taking cues from the Fed's extraordinary steps to bolster markets and the huge stimulus package. U.S. crude rose 2.04% to $23.06 a barrel. Brent crude rose 0.84% to $26.56 per barrel. Energy markets have been caught in a tug-of-war between hopes for stimulus spending and worries about excess oil supplies.

Gold, normally bought as a safe haven, was slightly lower. Spot gold fell 0.34% to $1,626.01 per ounce. Gold market participants remained concerned about a supply squeeze after a sharp divergence between prices in London and New York. The virus has grounded planes used to transport gold and closed precious metal refineries.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Download The Devdiscourse News App for Latest News.


TRENDING

OPINION / BLOG / INTERVIEW

Ayurveda for COVID 19: Professionals owe the responsibility to protect it from quacks and fake news

Indian Ayurveda professionals are lagging behind their foreign counterparts in handling quacks and protecting credentials of the Ayurveda at the time of COVID 19 pandemic. The professionals of Ayurveda cannot abjure the responsibility to co...

Education post-coronavirus: Schools to rush for more digitalization

Digital education would undoubtedly boom in the post-coronavirus world, supported by educational institutions that have discovered its efficiency during the crisis, but it is still not expected to outshine traditional classroom learning....

Public health care post-COVID 19 to go for revamping, not rebooting

Until now, the economies used to classify healthcare sector under social expenditure. However, the devastation caused by COVID 19 pandemic has upgraded public healthcare on topmost priority and core economic activity for controlling future ...

Coronavirus lockdowns to speed up long-pending revamping of supply chains

With millions of production lines impacted, business disruptions to some extent are unavoidable and the lessons learned from this turbulence will leave an everlasting impact on both global and local levels of supply chains....

Videos

Latest News

Armenia extends emergency restrictions till April 10 - PM

Armenia is extending emergency restrictions for another 10 days, until April 10, in an effort to curb the spread of the coronavirus, Prime Minister Nikol Pashinyan said.The tiny former Soviet republic of around 3 million people had reported...

US STOCKS-S&P 500 set for worst first quarter since 1938

Wall Street was set to open lower on Tuesday, with the SP 500 headed for its worst first quarter since 1938 as evidence growing of the scale of the damage caused by the collapse in oil prices and business activity due to the coronavirus. Te...

Soccer-Slovak club Zilina face liquidation over financial woes

Seven-time Slovak champions Zilina face liquidation due to the financial troubles caused by the domestic seasons suspension after the coronavirus outbreak, the club said. Zilina, one of the most popular clubs in Slovakia, have already termi...

Not the time to find faults but to take action: Health Min official on Nizamuddin congregation

Amid apprehensions of substantial spread of COVID-19 after a religions congregation in Nizamuddin in the national capital left many infected with the virus, the Health Ministry on Tuesday said it was not the time to find faults but to take ...

Give Feedback