Markets in Asia advance on hopes of US stimulus package

Markets in Asia continued to advance on Friday after hopes of a coronavirus relief bill in the US helped Wall Street to a third day of gains.

Indexes in Tokyo, Seoul and Shanghai were all in the green, but Australia’s ASX fell.

Wall Street appeared to shrug off miserable news on unemployment as the S&P 500 rose 6.2%, bringing its three-day rally to 17.6%, while the Dow industrials have risen an even steeper 21.3% since Monday.

Nearly 3.3 million Americans applied for unemployment benefits last week, easily breaking the previous record set in 1982, as layoffs and business shutdowns sweep across the country.

Analysts said the market finished higher on Thursday because the bad news on unemployment was expected.

“There is no sugar coating these numbers — they are bad,” said Jamie Cox, managing partner for Harris Financial Group.

“Markets have had several days to digest what everyone knew was coming. Therefore, the market response to these numbers may differ than what people might expect.”

Despite the big gains, the S&P 500 remains 22% below its February high and analysts expect more dire economic headlines, and market turbulence, in the days ahead.

The US Senate unanimously approved a 2.2 trillion dollar (£1.8 trillion) plan earlier this week, which includes direct payments to US households and aid to hard-hit industries.

It will be voted on by the House of Representatives on Friday.

The prospect of a big financial shot in the arm for businesses and households helped offset some of the concerns about the steep job losses the economy is beginning to see due to the coronavirus.

It also reassured world markets.

Japan’s Nikkei 225 index was at 18,895.30 by midday local time on Friday, and South Korea’s Kospi rose to 1,707.20.

The Hang Seng in Hong Kong advanced 0.8% to 23,528.94, while the Shanghai Composite index was at 2,781.40.

Jakarta’s benchmark jumped 5.7% and Singapore’s climbed 2.1%, but Australia’s S&P/ASX 200 fell 2.4% to 4,989.10.