Asian stock market: Bulls cheer Fed action, Nikkei 225, ASX 200 gain over 4.0%
|- Asian equities climb as Fed unveils corporate bond-buying, offers support to non-profit organizations.
- The fears of the Coronavirus wave 2.0, US FDA warning over Remdesivir probe the market’s optimism.
- BOJ increased size of lending program, RBA minutes conveyed no surprises.
- Fed Chair Powell’s testimony becomes the key to watch.
Shares in Asian remain strongly bid ahead of the European session on Tuesday. The market’s optimism initially took clues from the Fed’s corporate bond-buying that propelled Wall Street during late-Monday. Also supporting the upbeat sentiment could be an increase in BOJ’s asset purchase program as well as RBA’s readiness to keep the three-year yield target.
In doing so, the markets ignored the downbeat concerns relating to the coronavirus (COVID-19). Beijing upgraded some city area to high-risk zones while also signaling extension of Monday’s partial shutdown for another eight days. On the other hand, the US Food and Drug Administration (FDA) warned over the usage of the much-championed drug Remdesivir while citing reduced effectiveness.
Against this backdrop, MSCI’s index of Asia-Pacific shares gains 2.6% whereas Japan’s Nikkei 225 surge over 4.0% to 22,430 by the press time. Further, Australia’s ASX 200 also cheers the downbeat signals from the RBA minutes by rising 4.15% to 5,957 but New Zealand’s NZX 50 lacks the courage to follow its Aussie counterpart amid mixed consumer survey and monthly inflation data at home.
Moving on, South Korea’s KOSPI shrugs off the North Korean warnings as it jumps 4.30% to 2,118 as we write. Additionally, stocks in China, India and Hong Kong are moved to a less extend, still gaining above 1.0%, as fears of the pandemic and/or geopolitical tensions question the buyers.
It should also be noted that the US 10-year Treasury yield extends recovery moves beyond 0.70%, currently around 0.73%, whereas the US stock futures also portray gains over 1.0% at the time of writing.
Looking forward, US Fed Chair Powell’s Testimony will be the key event considering his latest dovish statements that triggered market rout. Other than that, UK employment data and BOJ Governor Haruhiko Kuroda’s speech, followed by inflation and sentiment indices from Germany as well as the US Retail Sales, could entertain the market players during the day.
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