Coronavirus: Asia markets rise after US stimulus package agreed


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President Donald Trump and the US Senate have agreed an economic relief package worth more than $1.8 trillion (£1.5tn), sending Asian shares higher.

Markets had rocketed on Wall Street and in London on Tuesday in anticipation of a deal being struck.

On Wednesday, Japan’s benchmark Nikkei 225 index was up 7.9% following news of the relief deal.

The stimulus package includes money to bail out industries that have been affected by the crisis.

In the US, the Dow Jones Industrial Average saw its biggest one-day gain since 1933 on Tuesday, surging 11.4% although the deal had not yet been signed.

In Asia, the Hang Seng index in Hong Kong rose 3.1%, and China’s Shanghai Composite was up by 2% in Wednesday’s trading session.

“It’s good news, but we’re not out of the woods yet, ” said Tom Stevenson, investment director at fund manager Fidelity International.

“When markets are falling, you get these big rallies but you shouldn’t get stuck on that. They do bounce around in these situations.”

It continues a period of unprecedented volatility as markets react wildly to the economic impact of the coronavirus pandemic.

This month alone has seen the Dow having the five biggest daily gains and five biggest falls of its 135-year history.

How will the stimulus work?

Many countries are now working on stimulus packages to support their economies, but these plans have received mixed responses from investors.

The US rescue package follows five days of intense negotiations to try to agree a deal that will provide aid for American workers and businesses.

“At last we have a deal,” Senate Majority Leader Mitch McConnell announced shortly before 02:00 Washington DC time on Wednesday morning. “In effect, this is a wartime investment,” he added.

The full details of the planned legislation have not been published yet but lawmakers suggested on Tuesday that an initial proposal by Republicans for direct cash payments would be included.

The package of measures will help ease the pain of mass layoffs as businesses have been forced to close and employees ordered to stay at home.

Is an end to the pandemic in sight?

Mr Trump said on Tuesday he hoped the US would shake off coronavirus within less than three weeks – even as New York Governor Andrew Cuomo warned the illness was spreading faster in his state than “a bullet train”.

America is more than midway through a 15-day attempt to slow the spread of the virus through social distancing.

Nearly 19,000 people have died with coronavirus across the planet since it emerged in China’s Wuhan province in January, and more than 420,000 infections have been confirmed.

Southern Europe is now at the centre of the pandemic, with Italy and Spain recording hundreds of new deaths every day.

Governments around the world have responded by locking down societies in the hope of slowing the spread of the virus.



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