SYDNEY (BLOOMBERG) – Stocks in Asia looked set to extend a global rally on Wednesday (March 25) after the best session for US stocks in almost a dozen years, with investors rediscovering some appetite for risk as the US Congress negotiates an emergency-spending bill.
Australia's benchmark index jumped 6 per cent in early trading while futures rose in Hong Kong and Japan, indicating gains could extend to a second day for Asia-Pacific shares.
The Dow Jones Industrial Average soared in its biggest one-day percentage gain since 1933 on Tuesday after US lawmakers said they were close to a deal for an economic rescue package in response to the blows from the coronavirus outbreak, injecting optimism following the biggest selloff since the financial crisis.
But the S&P 500 futures opened little changed in Asia on Wednesday after the index soared more than 9 per cent – the biggest one-day gain since October 2008. The US dollar also slumped against developed and emerging currencies alike, in a tentative sign of reduced stress after the greenback's recent surge. Treasuries sank.
Key gauges of US manufacturing and services in March fell the most on record, showing the deep toll the pandemic has already taken, data on Tuesday showed.
"Sentiment has improved, but to call it a turning point is too strong a word for now," said James McCormick, global head of desk strategy at NatWest Markets. "It is more of a tug-of-war. Policy bazooka is in place, but will be fighting against very weak data and still worrying trends on Covid-19 data. We are more neutral on risk assets now."
About US$26 trillion has evaporated from equity markets since mid-February, and investors have been left sifting the wreckage and weighing the chances of a lasting rebound. On the one hand, Wall Street has Read More – Source