Stocks across Asia edged higher as investors weighed new US support measures to cushion the economic impact of coronavirus that helped Wall Street cap off a historic week of gains.
Japan’s Topix stock index added 0.6 per cent on Friday, while South Korea’s Kospi benchmark gained 0.8 per cent. Traders pointed to lighter trading volumes with markets in Australia, Singapore and Hong Kong closed for Good Friday, ending a week that has been characterised by cautious optimism over the possibility that the spread of Covid-19 is slowing.
“There is tentative evidence that the situation is improving in some of the most deeply stricken European countries, hospitalisations are stabilising in hotspots such as New York, according to officials, and the lockdown in Wuhan has been lifted for now,” wrote analysts at Citi. “Risk assets have taken note.”
In China, the CSI 300 index of Shanghai- and Shenzhen-listed stocks slipped 0.3 per cent after official data showed that consumer inflation eased in March.
Overnight, the S&P 500 closed 1.4 per cent higher, taking its gains for the four-day week to more than 12 per cent in what is its best weekly performance since 1974.
US markets were boosted after the Federal Reserve unveiled further support for markets and the economy, including an additional $2.3tn of loans to support small businesses during the pandemic.
Meanwhile, oil fell on Thursday despite a deal between Opec and Russia to cut production by 10m barrels a day. The economic havoc wrought by the pandemic has prompted fears of a collapse in crude demand.
The price of Brent crude closed down 4 per cent on Thursday to $31.48 a barrel, reversing a rally earlier in the day. Brent has more than halved in the year so far. Crude was not traded during Asia hours on Friday.
A rally in stocks that began on Monday fed into credit prices later in the week, which were spurred by news that policymakers would buy exchange traded funds that own debt issued by riskier companies.
The largest ETF for high-yield debt in the US, known by its ticker HYG, rose by more than 6 per cent on Thursday in its biggest one-day jump since the global financial crisis more than a decade ago.
The new wave of stimulus in the US also pushed gold to its highest level in a month, to $1,689.70 per troy ounce.