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Global shares rise after surge in US on stimulus measures

Traders gather at a post on the floor of the New York Stock Exchange, Wednesday, March 4, 2020. Stocks are surging in early trading on Wall Street, led by health care stocks after Joe Biden scored a number of Super Tuesday wins. (AP Photo/Richard Drew)
March 05, 2020 - 12:33 AM

TOKYO - Shares in Europe and Asia advanced Thursday, tracking an overnight surge on Wall Street as governments and central banks take more aggressive measures to fight the virus outbreak and its effects on the economy.

Benchmarks rose in almost every market, though U.S. futures pointed to a weak open.

France's CAC 40 added 0.5% in early trading to 5,490.52, while Germany's DAX was up nearly 0.6% to 12,194.33. Britain's FTSE 100 inched up 0.2% to 6,830.92.

U.S. shares were set to drift lower with Dow futures dipping 0.9% to 26,731. S&P 500 futures were down 0.9% at 3,085.70.

The gains on Wall Street more than recouped big losses from a day earlier as wild, virus-fueled swings around the world's markets extend into a third week. Health care stocks led gains after former Vice-President Joe Biden solidified his contender status for the Democratic presidential nomination. Investors see him as more business-friendly than Senator Bernie Sanders.

The rally's momentum accelerated around midday after House and Senate leadership reached a deal on a bipartisan $8.3 billion bill to battle the coronavirus outbreak. The measure's funds would go toward research into a vaccine, improved tests and drugs to treat infected people.

The upward momentum carried into Asian trading, where Japan's benchmark Nikkei 225 rose 1.1% to finish at 21,329.12. Australia's S&P/ASX 200 added 1.1% to 6,395.70. South Korea's Kospi gained 1.3% to 2,085.26. Hong Kong's Hang Seng added 2.1% to 26,762.43, while the Shanghai Composite jumped 2.0% to 3,071.68. India's Sensex climbed 0.5% to 38,593.25.

Shares were also higher in Taiwan and Southeast Asia.

Shares in Chinese blue chips rose Thursday in Hong Kong, suggesting “investors' confidence was restored by the surge in U.S. markets. We don't have the panic selling evident last week when the market fell sharply," said Francis Lun, a stock analyst in Hong Kong.

“Despite the spectre of coronavirus lurking over the world's economy, all appears well with the world, judging by Wall Street's overnight performance," Jeffrey Halley of Oanda said in a commentary. “China's rate of new infections has plunged, even as coronavirus makes its presence felt in the far-flung corners of the globe."

Investors expect other central banks will follow up on the Federal Reserve’s surprise move Tuesday of slashing interest rates by half a percentage point in hopes of protecting the economy from the economic fallout of the new coronavirus.

Even though many investors say they know lower interest rates will not halt the spread of the virus, they want to see central banks and other authorities do what they can to lessen the damage.

The Bank of England has a meeting on March 26 on interest rates. The European Central Bank and others have already cut rates below zero, meanwhile, which limits their monetary policy firepower. But economists say they could make other moves, such as freeing up banks to lend more.

ENERGY: Benchmark crude oil rose 19 cents to $46.97 per barrel in electronic trading on the New York Mercantile Exchange. It fell 40 cents to settle at $46.78 a barrel. Brent crude oil, the international standard, gained 25 cents to $51.38 a barrel.

CURRENCIES: The dollar fell to 107.27 Japanese yen from 107.55 yen on Wednesday. The euro fell to $1.1127 from $1.1131.

News from © The Associated Press, 2020
The Associated Press

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