Asian equities soared again Wednesday after US lawmakers finally agreed a mammoth stimulus package to support the world’s top economy against the impact of the coronavirus pandemic.
While the deadly disease continues to spread, traders have a rare semblance of optimism after weeks of carnage across global markets, with eyes fixed on Washington where lawmakers in the early hours thrashed out an emergency bill worth as much as $2trillion — around 10 percent of US gross domestic product. “At last, we have a deal,” Senate Majority Leader Mitch McConnell said, citing the massive “wartime level of investment into our nation”.
The prospect of a massive spending splurge, combined with the Federal Reserve’s pledge to essentially print as much cash is needed, sent Wall Street into overdrive Tuesday, with the Dow seeing its biggest rise since 1933, while the S&P 500 enjoyed its best day in more than a decade. And the gains spread into Asia, which rallied for a second straight day, with extra impetus later in the day coming from the news out of Washington.
Tokyo ended eight percent higher, with investors there also relieved that the 2020 Olympics had been postponed rather than cancelled. Hong Kong, Shanghai and Singapore climbed more than two percent, Sydney and Manila rallied more than five percent and Seoul piled on more than four percent. Taipei added almost four percent, while Bangkok and Wellington were also well up.
The crude market — which has been hammered by the outbreak’s impact on demand, as well as a price war between Saudi Arabia and Russia — also enjoyed a much-needed lift, though analysts cautioned the commodity still faced uncertainty.
