March 20, 2020: Asian equities enjoyed some much-needed gains Friday after another volatile week on global markets as investors took solace in a blockbuster series of government and central bank measures aimed at cushioning the economic blow from the coronavirus.
The dollar also eased somewhat after a lengthy rally fuelled by traders cashing out of their investments, while the embattled oil market extended Thursday’s gains.
With the deadly pandemic showing no sign of ending, countries are going into lockdown, effectively shutting down the global economy and leaving experts in the dark as to how deep and long an expected recession will last.
On Thursday, US Senate Majority Leader Mitch McConnell presented a $1 trillion emergency relief package to combat the turmoil, with $1,200 cash handouts for individuals.
It also includes $208 billion in loans for companies hit by the crisis — $58 billion of it for the troubled airline sector — and $300 billion in small business loans.
The plan is the latest in a series of measures put forward by Washington and comes on top of Federal Reserve interest rate cuts and pledges worth hundreds of billions of dollars to provide liquidity to creaking financial markets.
It also comes in tandem with similar moves by governments and banks around the world, which have provided some support to investors, but which many observers warn could still be too little as the crisis rumbles on.
Hong Kong stocks ended the morning session 2.8 percent higher, while Shanghai was up 0.5 percent, Sydney added 1.9 percent and Seoul jumped more than four percent.
Taipei gained almost six percent, Manila added 2.7 percent and Bangkok jumped 3.4 percent with Mumbai and Singapore each more than one percent higher. Wellington jumped one percent.
“For now… the artillery barrage from the world’s central banks and government treasuries seems to have stopped the rot sweeping the global economy for now,” said OANDA’s Jeffrey Halley.
The advances followed a positive lead from Wall Street and Europe.