1 Month : From Feb 2020 to Mar 2020
By Frances Yoon
U.S. futures rose, stock markets in Asia-Pacific and Europe gained and the dollar weakened as lawmakers in Washington and the Trump administration reached an agreement on an estimated $2 trillion stimulus package to limit the economic damage from the coronavirus pandemic.
Futures for the S&P 500 and Dow Jones Industrial Average rose, suggesting U.S. shares are likely to gain when the market opens in New York. The WSJ Dollar Index declined about 0.5%, with currencies including the Australian dollar, New Zealand dollar and British pound strengthening against the greenback.
Indexes in Europe opened higher, with the pan-continental Stoxx Europe 600 gaining 1.8% and the U.K.'s FTSE 100 rising 1.7%
Shares in Asia had risen earlier Wednesday following a surge in U.S. indexes Tuesday as hopes built for a deal in Washington. They extended those gains in the afternoon in Hong Kong after the White House said an agreement had been struck.
Hong Kong's Hang Seng Index rose 2.7%. In Japan, the Nikkei 225 jumped 8% to close at its highest in more than two weeks, while Australia's S&P/ASX 200 and South Korea's Kospi each rose more than 5%.
"This is definitely a step in the right direction," said Paul Sandhu, head of multi-assets quant solutions for Asia Pacific at BNP Paribas Asset Management. "What we needed right away was an economic buffer essentially stabilizing the downside risk for the next three or four months while the virus hopefully starts to dissipate."
Mr. Sandhu said he and his team would start to look for investment opportunities but would be very focused on risk management, given uncertainty over how much the novel coronavirus has spread in the U.S.
Catherine Yeung, investment director at Fidelity International in Hong Kong, said some investors in the region were buying stocks for the first time in weeks.
However, Ms. Yeung characterized this as bargain-hunting, and said markets could stay volatile as the pandemic continued to spread globally. Confirmed cases world-wide passed 400,000 Tuesday.
"It's too early to tell whether we are on a path to recovery" economically, she said. "What will be telling are the rescue packages we see in the weeks and months [ahead] that will provide unprecedented support for jobs and wages."
The Dow Jones Industrial Average soared 11% Tuesday, its biggest one-day gain since 1933, and the S&P 500 closed 9.4% higher.
The yield on the 10-year U.S. Treasury note rose to 0.849% from 0.813% Tuesday. Bond yields rise as prices fall.
Write to Frances Yoon at firstname.lastname@example.org
(END) Dow Jones Newswires
March 25, 2020 04:23 ET (08:23 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.