NEW YORK: Global stock markets surged on Thursday after President Donald Trump was acquitted in an impeachment trial and China announced a tariff cut on US imports and aid to businesses reeling from a virus outbreak.
London and Frankfurt opened higher, while Tokyo, Hong Kong and Seoul rose more than 2 per cent.
Markets also were boosted by strong US corporate earnings. That helped to dampen fears about the impact of sweeping Chinese efforts to contain a viral disease that closed factories, restaurants and shops as the death toll rose.
“The markets are not only holding up, but they’re going up,” said Stephen Innes of AxiCorp in a report.
To suggest risk appetite continues to creep back in favor might be the biggest understatement of the week.
Trump was acquitted after a rare trial before the US Senate on charges of abuse of office following accusations he pressured Ukraine to investigate Joe Biden, a potential rival in this year’s presidential election.
China announced tariff cuts on $75 billion of US imports including auto parts in response to similar American reductions in a trade truce. That followed the signing of the Phase one agreement in their fight over Beijing’s technology ambitions and trade surplus.
Meanwhile, Chinese state TV said the government will cut value added taxes and offer low interest loans to help businesses weather a downturn caused by anti-virus measures that have depressed travel, retail sales and other industries.
Thailand’s central bank cut its benchmark lending rate this week to help the country weather the loss of Chinese tourists. Brazil, a supplier of iron ore, soybeans and other commodities to China, also announced a rate cut.
In early trading, London’s FTSE 100 advanced 0.4pc to 7,509.67 and Frankfurt’s DAX gained 0.7pc to 13,567.68. France’s CAC 40 added 0.7pc to 6,030.57.
On Wall Street, the future for the benchmark S&P 500 index was up 0.5pc and that for the Dow Jones Industrial Average gained 0.6pc. On Wednesday, the S&P 500 rose 1.1pc to a record and the Dow climbed 1.7pc. The Nasdaq composite gained 0.4pc.
In Asia on Thursday, Tokyo’s Nikkei 225 jumped 2.4pc to 23,873.59 and Hong Kong’s Hang Seng gained 2.6pc to 27,493.70. South Korea’s Kospi rallied 2.9pc to 2,227.94.
The Shanghai Composite Index gained 1.7pc to 2,866.51.
Sydney’s S&P-ASX 200 added 1pc to 7,049.20 and benchmarks in Taiwan, New Zealand and most of Southeast Asia also advanced.
The impact of China’s anti-virus measures on the second largest global economy is unclear. Many stores, restaurants and cinemas are closed in an effort to reduce the risk the infection might spread. Companies are warning of lower revenue and profit.
Tesla Inc plunged 17.2pc on reports production at its Shanghai factory will be delayed. The company warned investors last week delays were possible.
Investors got encouraging news about the US economy when payroll processor ADP said pn Wednesday private US companies added 291,000 jobs in January, a big increase from December.
The Institute for Supply Management said its index of business activity by service sector companies increased in January, an indicator of economic expansion.
Energy: Benchmark US crude rose 59 cents to $51.35 per barrel in electronic trading on the New York Mercantile Exchange. The contract advanced $1.14 on Wednesday to close at $50.75. Brent crude, used to price international oils, gained 33 cents to $55.61 per barrel in London. It added $1.32 the previous session to $55.28.
Currency: The dollar advanced to 109.85 yen from Wednesday’s 109.82 yen. The euro rose to $1.1009 from $1.0998.
