Asian shares rallied for a fourth straight session on Thursday as U.S. markets swung sharply higher and another dose of central bank stimulus offered some salve for the global economic outlook.
Wall Street seemed to find relief in the strong performance of former Vice President Biden in the Democratic nomination campaign. Biden is considered less likely to raise taxes and impose new regulations than rival Bernie Sanders.
The U.S. House of Representatives also approved an $8.3 billion funding bill to combat the spread of the virus, sending the emergency legislation to the Senate.
In another wild swing, the Dow surged 4.53%, while the S&P 500 gained 4.22% and the Nasdaq 3.85%.
Asian markets followed, if more cautiously. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.7%, in its fourth day of gains.
Japan’s Nikkei rose 0.9% and hard-hit Australian shares finally managed a bounce of 1.1%. Shanghai blue chips put on 1.3%.
E-Mini futures for the S&P 500 dipped 0.6% after its overnight jump, but EUROSTOXXX 50 futures rose 0.6% and FTSE futures 0.4%.
The upbeat sentiment comes despite the coronavirus crisis showing no signs of slowing, with mounting deaths globally, Italy closing all of its schools and California declaring a state of emergency as cases there grow.
He noted the bank’s all-industry PMI measure of activity for February slumped 6.1 points, the largest one-month drop on record, and at 46.1 was at the lowest since May 2009.
The Federal Reserve and Bank of Canada had both responded by cutting interest rates by 50 basis points, and markets in the euro zone are pricing in a 90% chance that the ECB will cut its deposit rate, now minus 0.50%, by 10 basis points next week.
Yet, as policymakers grapple with the best strategy to avoid a global recession, some major central bank have been less keen to follow suit.
In the end, monetary policy was not a cure for the disease and the impact was likely to get worse before it got better.