Tokyo soars 8% as US stimulus deal lifts world markets

Thursday, 26 Mar, 2020

Wall Street stocks jumped early Wednesday as markets awaited a vote on a two trillion US dollars package agreed by congressional leaders to boost the USA economy ravaged by the coronavirus outbreak.

NY stocks bounced back with a vengeance on Tuesday notching up their biggest one-day gain in nearly 90 years.

The Dow Jones Industrial Average jumped 2,112.98 points, a record for a single day, as negotiations continued over a massive stimulus package to help the crippled economy deal with the coronavirus pandemic.

The S&P 500 was down 1.4%, as of 10 a.m.

Treasury yields were holding relatively steady.

Despite hopes surrounding the stimulus agreement, James Bullard of the St. Louis Federal Reserve Bank told reporters that he expects jobless claims to surge and said the USA won't resume normal life until people feel safe.

In metals markets, gold changed hands at $1,608.78 an ounce, retaining most of Tuesday's gains of nearly 5%, its biggest jump since 2008.

In Europe markets finished mixed as Britain's FTSE-100 rose 1.94%, France's CAC-40 gained 2.28% and Germany's DAX fell 0.63%.

Congress and the White House did announce an agreement early Wednesday, with the Senate possibly voting on it in the afternoon.

"At last we have a deal", Republican Senate Majority Leader Mitch McConnell said.

Some investors in Asia are buying stocks for the first time in weeks, according to Catherine Yeung, investment director at Fidelity International in Hong Kong. But $250 billion has been set aside for direct payments to individuals and families, while $350 billion will be used for small business loans and $250 billion will fund unemployment insurance benefits.

"We nonetheless haven't seen proof that issues are bettering by way of contagion (and) additionally haven't absolutely appreciated how far this recession will go".

Secretary of State Mike Pompeo spoke Tuesday with Saudi Crown Prince Mohammed bin Salman Al Saud about "the need to maintain stability in global energy markets amid the worldwide response" to the coronavirus, said State Department spokesperson Morgan Ortagus.

Democratic Senate Minority Leader Chuck Schumer added: "This is not a moment of celebration but one of necessity". "Because until then we'll have these huge relief-rally days - then we'll get a scary day and the market will plunge down again". Commonwealth Bank and ANZ rose more than 5%, Westpac was up more than 2% and the NAB gained3.75%.

New orders for key US -made capital goods fell sharply in February as demand for machinery and other products slumped, suggesting a deepening contraction in business investment. Tokyo's Nikkei closed at 19,546.63, while the Hang Seng rose 3.8% to 23,527.19.

On Wednesday, for example, the S&P 500 was down as much as 1.6% before it turned decisively higher. Gold futures dropped 1.01%.

In other trading, US crude oil gained 38 cents to $24.39 per barrel in electronic trading on the New York Mercantile Exchange.