Asian stocks were stable in the calm of Good Friday after Wall Street closed its best week in 45 years thanks to the Federal Reserve’s titanic effort to support the economy through the coronavirus crisis. Oil prices fell after major oil-producing countries struggled to finalize an agreement on production cuts.
European and American markets are closed on Good Friday. The long weekend offers a respite from the tragedy that has plagued markets for weeks because of the coronavirus epidemic.
In Asia, the Nikkei 225 index for Japan advanced, gaining 0.8% to close at 19,498.50. In South Korea, the Kospi jumped 1.3% to 1,860.70. Equities also rose in Taiwan, Thailand and Malaysia. But the Shanghai composite index lost 1% to 2,796.63.
Overnight in Europe, countries that use the euro have agreed on measures that will help each other bear the burden of the costs of the crisis. The 500 billion euro package (about 550 billion US dollars) does not, however, include a more ambitious proposal to borrow money together.
Earlier, the US central bank announced plans to provide up to US $ 2.3 trillion in loans to households, local governments and businesses as the country learns what economists say is the worst recession since decades.
The Fed’s actions have completely overshadowed a government report that an additional 6.6 million people claimed unemployment benefits last week. Stock market investors expected such dismal figures, and some are considering a possible reopening of the economy.
“It looks like the Feds are on a mission to make holes in every dam that stops the flow of credit. And it looks like they have a lot more dynamite if necessary,” said Stephen Innes of AxiCorp. said in a comment.
Strong week for Wall Street
The stock market is not the economy, and this distinction has become even clearer this week. For the week, the S&P 500 jumped 12.1%, its best performance since the end of 1974.
Stock market investors are constantly looking to the future of the economy in a few months or more, which largely depends on the state of the coronavirus pandemic and the massive shutdowns supposed to contain it.
On Thursday, the S&P 500 advanced 39.84 points to 2,789.82. The Dow Jones Industrial Average added 1.2% to 23,719.37, and the Nasdaq climbed 0.8% to 8,153.58.
Although it is hoped that a plateau will arrive for infections in several hot spots, this is not guaranteed.
Thursday’s earnings were capped by a further drop in oil prices, which collapsed amid the coronavirus pandemic.
US benchmark crude oil fell $ 2.33, or 9.3%, to $ 22.76 a barrel after investors learned that Russia and OPEC members had reached a preliminary deal for reduce production by 10 million barrels per day. This is far from what would be needed to compensate for the sharp drop in demand due to coronavirus closings, said Dave Ernsberger, global raw material prices manager at S&P Global Platts.
Brent crude fell $ 1.36, or 4.1%, to $ 31.48 a barrel.
OPEC said on Friday that approval of the proposal for gradual production cuts is dependent on Mexico’s agreement. The Top 20 Economies Group will hold a teleconference on Friday to discuss global production in more detail.