Stock markets in the Asia-Pacific region mostly traded higher Friday, following a rally in U.S. markets as the government moved closer to approving the largest economic-relief package in history.
Hong Kong’s Hang Seng and the Shanghai Composite Index rose about 1%, as did Japan’s Nikkei 225 and South Korea’s Kospi, paring some earlier gains. Australia’s ASX 200 fell 2.7%.
Singapore’s FTSE Straits Times Index gained nearly 3% after the country rolled out a second $33.2 billion stimulus package, boosting government spending to fight the coronavirus to about 11% of GDP.
Fiscal stimulus has come in full force in the U.S., while central banks are pumping unprecedented amounts of funding into the financial system, said Sunny Ng, a multiasset portfolio manager at PineBridge Investments.
In just days, he said measures by the U.S. Federal Reserve had eclipsed the first two iterations of the massive bond-buying program, known as quantitative easing, which it first rolled out in the depths of the global financial crisis more than a decade ago.
That has helped bring down a previously huge demand for dollars and calmed the markets down, said Mr. Ng. “We are seeing a bit of a bear market rally here…it’s not uncommon to see such bouncebacks,” he said.
The WSJ Dollar Index edged down 0.2% to 93.82. The index tracks the greenback against 16 other currencies.
S&P 500 futures traded 1.5% lower on Friday in Asia. The yield on the 10-year U.S. Treasury note lost 0.047 percentage point to 0.805%. Bond yields fall as prices rise.
Mr. Ng said a lot of uncertainties remain as this is a self-imposed economic crisis led by the massive shutdowns across the U.S. All eyes will be on whether the U.S. is reopening its economy in the next few weeks and its repercussions, he said.
The U.S. has overtaken China as the country with the most coronavirus cases with 85,505 confirmed infections, according to data compiled by Johns Hopkins University. Globally, more than half a million people have been infected across 175 countries and regions, and the death toll has surpassed 24,000.
On Thursday, the Dow Jones Industrial Average soared 6.4% back into a bull market, after reaching its bear-market low three days earlier. The S&P 500 rose 6.2% while the technology-heavy Nasdaq Composite jumped 5.6%. Both indexes are still far from returning to a bull market.