“Asian shares have been able to rally slightly for a fourth consecutive day on Thursday as some extra stimulus from the central banks try to salvage anything from the damage caused by the coronavirus…….
By Mihir Kapadia, the CEO of Sun Global Investments
The cautious rise saw Asia-Pacific shares outside Japan add gains of 0.7%, while the Japan’s Nikkei rose 0.9% and Australian shares, which have been hit hard as of late, managed to rise 0.9% and 1.1% respectively to ease the strain.
We can in all likelihood expect growth to have been slowed this quarter as the coronavirus continues to spread with California now declaring a state of emergency. Although the Fed and Bank of Canada had both cut interest rates to help deal with the impact, while the ECB is likely to cut its deposit rate, there is still a struggle on how to avoid a possible recession as markets remain fragile.
Although it appears strange that markets have rallied, much of it can be pointed towards the results of ‘Super Tuesday’ in the US which saw Joe Biden gather significant momentum in the Democratic nomination race. With Biden unlikely to raise taxes, markets have responded positively with Dow Jones surging 4.53%, the S&P 500 gaining 4.22% and the Nasdaq enjoying a rally of 3.85% in what has ultimately carried momentum into international markets.”
Source : ETFWorld.co.uk