Asian shares rise, echoing Wall St optimism on virus battle

Daniel Fowler
April 8, 2020

The Dow Jones Industrial Average rose 1,215 points, or 5.8%, to 22,267, and the Nasdaq was up 5.6%.

The stock market is looking ahead to when economies will reopen after authorities shut down businesses and travel and issued stay-at-home orders in hopes of slowing the spread of the virus.

USA equities markets are starting the week with a rally driven by hopeful signs that the spread of the coronavirus outbreak may be slowing in response to aggressive social distancing measures.

New coronavirus infections and deaths are showing signs of slowing in Spain and Italy.

The S&P 500 has rallied almost 19% since hitting a low on March 23, though it's still down 21.5% from its record set in February. Asian shares and USA futures have rebounded as investors grasped at threads of hope that the battle against the coronavirus pandemic may be making some progress in some hard-hit areas.

The S&P 500 dipped 0.2% after erasing a surge of 3.5% earlier in the day. The center of the USA outbreak, New York, also reported the number of daily deaths has been effectively flat for two days.

"Positive momentum coming out of Monday's world market rally has continued overnight and into this morning", said Colin Cieszynski, chief market strategist at SIA Wealth Management in Toronto.

Earlier Monday, oil prices fell again as Russian Federation and Saudi Arabia negotiate reducing production to stabilize the market.

The IMF noted early signs of a recovery in the world's second-largest economy China, including rising pollution levels, but news that a meeting of top oil producers had been delayed sent oil prices slumping.

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The rally faded after the price of US oil flipped from a gain to a steep loss of more than 9%. Brent crude, the worldwide standard, lost $1.06, or 3.1%, to $33.05 a barrel.

Experts say more deaths are on the way due to COVID-19, which has already claimed at least 81,000 lives around the world.

A Reuters poll of economists said a global recession would be deeper than previously thought, although most clung to hopes for a swift rebound. Many experts are skeptical of China's virus figures, but investors also see signals that the number of daily infections and deaths may be close to peaking or plateauing in Spain, Italy and NY. That would bring the total to almost 15 million over the past three weeks.

Central banks and governments are promising massive amounts of aid to prop up the economy.

In another sign that investors are feeling more optimistic about the economy's path, the yield on the 10-year Treasury rose toward its first gain in four days.

The price increases also come after Japanese Prime Minister Shinzo Abe said he is preparing to announce a 108 trillion yen ($1.6tn) package to bolster the world's third-largest economy.

Japan's benchmark Nikkei 225 gained 1.3% to 18,808.53 while South Korea's Kospi gained 1.2% to 1,812.87.

In Europe, Germany's DAX returned 4.9 per cent and France's CAC 40 jumped 3.8 per cent.

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