Asian Shares Boosted by Wall Street Gains, IMF Aid Package Announcement
The major Asia-Pacific stock indexes surged on Thursday, following the lead of Wall Street on Wednesday, and in reaction to the announcement of a $50 billion aid package to combat the impact of the coronavirus by the International Monetary Fund (IMF).
Meanwhile, investors continued to monitor for developments on the coronavirus outbreak that has now spread worldwide, with more than 90,000 confirmed cases globally. South Korea reported 760 new cases and 3 additional deaths, bringing the nationwide total number of infections to 6,088.
On Thursday, Japan’s Nikkei 225 Index settled at 21329.12, up 229.06 or +1.09%. Hong Kong’s Hang Seng Index closed at 26767.87, up 545.80 or +2.08% and South Korea’s KOSPI Index finished at 2085.26, up 25.93 or +1.26%.
In China, the Shanghai Index settled at 3071.68, up 60.01 or +1.99% and Australia’s S&P/ASX 200 Index finished at 6395.70, up 70.30 or 1.11%.
Asian Markets Track Wall Street Shares Higher
Asia-Pacific stock markets edged up on Thursday, tracking a surge on Wall Street as robust U.S. economic data, more policy stimulus and Joe Biden’s strong showing in the Democratic primary contests boosted investor sentiment.
Services sector activity in the United States jumped to a one-year high in February, data showed, and the House of Representatives passed an $8.3 billion emergency spending bill to combat the coronavirus outbreak.
‘The prospect of the Fed starting a global easing cycle … and ramped up U.S. fiscal firepower to fight COVID-19 were catalysts for equity markets to front-run economic relief”, Vishnu Varathan, a senior economist at Mizuho Bank, said in a note.
IMF Announces $50 Billion Aid Package
International Monetary Fund Managing Director Kristalina Georgieva announced a $50 billion aid package Wednesday to help fight the coronavirus. Georgieva said on CNBC’s “Squawk Alley” that the money is available “immediately” and is for low-income and emerging market countries. Most of the money will be interest-free, and countries do not need to have a preexisting program with the IMF to participate, she said.
“What we’re doing right now is reviewing country by country what are the financial needs, and engaging with these countries to make sure they are aware of this resource and we can immediately respond to them,” Georgieva said. “We’re in an early stage of engagement, but I can assure you that we will act very quickly as requests come.”
World Bank Approves $12 Billion in Emergency Financing to Help Poor Nations
The World Bank approved $12 billion in emergency financing to help poor nations with the health costs and economic impact of the outbreak, the organization said.
“We are working to provide a fast, flexible response based on developing country needs in dealing with the spread of COVID-19,” World Bank Group President David Malpass said in a statement.
Australia’s Trade Data Comes in Above Expectations
Australia’s January trade data released Thursday came in above expectations. The balance on goods and services came in at a surplus of $5.21 billion Australian Dollars on a seasonally adjusted basis, above expectations of a surplus of $4.8 billion Australian Dollars in a Reuters poll.
Additionally, the country warned on Thursday that the coronavirus crisis will deduct as at least half a percentage point from growth in the current quarter, according to Reuters.