Asian shares extended their rally on Wednesday in the wake of Wall Street’s big gains as US Congress appeared closer to passing a $2 trillion stimulus package to curb the coronavirus pandemic’s economic toll.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.3% with Australian shares rising 4.5% and South Korean shares gaining 4.0%. Japan’s Nikkei added 2.0%.
Japanese shares have been bolstered by aggressive buying from the Bank of Japan and pension money this week. That has prompted hedge funds to cover their short positions.
On Tuesday, MSCI’s gauge of stocks across the globe gained 8.39%, the largest single-day gain since the wild swings seen during the height of the global financial crisis in October 2008.
On Wall Street, the Dow Jones Industrial Average soared 11.37%, its biggest one-day percentage gain since 1933.
U.S. stock futures were down 0.5% in early Asian trade.
Investor fears about a sharp economic downturn are easing after the U.S. Federal Reserve’s offer of unlimited bond-buying and programs to buy corporate debt.
In the currency market, the dollar has slipped as a greenback liquidity crunch loosened slightly.
The euro traded at $1.0798 after four straight days of gains.
The dollar stayed firmer against the yen due to dollar demands at the March 31 end of the Japanese financial, trading at 111.33 yen, near a one-month high of 111.715 touched the previous day.
Gold soared almost 5%, its biggest gains since 2008, on Tuesday and last stood at $1,633, in part helped by concerns lockdowns in major producer South Africa could disrupt supply.
Confirmed cases are now topping 400,000 globally with New York City suffering another quick and brutal rise in the number of infections to around 15,000.
Oil prices steadied as hopes for U.S. stimulus offset fears from falling global demand.
The market remained pressured by a flood of supply after Saudi Arabia started a price war earlier this month, a move that dealt a crushing blow to markets already reeling from the epidemic.
U.S crude futures rose 1.8% to $24.45 per barrel.