ASIAN equities soared again Wednesday after US lawmakers finally agreed a mammoth stimulus package to support the world’s biggest 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 $2 trillion – around 10 per cent of US gross domestic product.
“At last, we have a deal,” Senate Majority Leader Mitch McConnell said, calling it a “wartime level of investment into our nation”.
“We have a bipartisan agreement on the largest rescue package in American history,” top Senate Democrat Chuck Schumer said shortly after McConnell spoke.
“So many people are being put out of work through no fault of their own. They don’t know what their future is going to be like, how are they going to pay the bills,” Schumer said. “Well, we come to their rescue.”
The measure will put cash directly into the hands of Americans, provides grants to small businesses and hundreds of billions of dollars in loans for corporations including embattled airlines, while expanding unemployment benefits.
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 and Singapore put on more than three percent and Shanghai was up 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 Mumbai, Bangkok and Wellington were also well up.
Adding to the more upbeat mood was the G7’s promise to do “whatever is necessary”.
The unprecedented moves are part of a worldwide response to the rapid financial shock caused by the COVID-19 outbreak, which has locked down countries including the US and brought the global economy to a juddering halt. afp