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Coronavirus: Asia markets rise after US stimulus package agreed | |
(about 1 hour later) | |
President Donald Trump and the US Senate have agreed an economic relief package worth more than $1.8 trillion (£1.5tn), sending Asian shares higher. | |
Markets had rocketed on Wall Street and in London on Tuesday in anticipation of a deal being struck. | Markets had rocketed on Wall Street and in London on Tuesday in anticipation of a deal being struck. |
On Wednesday, Japan's benchmark Nikkei 225 index was up 7.9% following news of the relief deal. | |
The stimulus package includes money to bail out industries that have been affected by the crisis. | |
In the US, the Dow Jones Industrial Average saw its biggest one-day gain since 1933 on Tuesday, surging 11.4% although the deal had not yet been signed. | |
In Asia, the Hang Seng index in Hong Kong rose 3.1%, and China's Shanghai Composite was up by 2% in Wednesday's trading session. | In Asia, the Hang Seng index in Hong Kong rose 3.1%, and China's Shanghai Composite was up by 2% in Wednesday's trading session. |
"It's good news, but we're not out of the woods yet, " said Tom Stevenson, investment director at fund manager Fidelity International. | "It's good news, but we're not out of the woods yet, " said Tom Stevenson, investment director at fund manager Fidelity International. |
"When markets are falling, you get these big rallies but you shouldn't get stuck on that. They do bounce around in these situations." | "When markets are falling, you get these big rallies but you shouldn't get stuck on that. They do bounce around in these situations." |
It continues a period of unprecedented volatility as markets react wildly to the economic impact of the coronavirus pandemic. | It continues a period of unprecedented volatility as markets react wildly to the economic impact of the coronavirus pandemic. |
This month alone has seen the Dow having the five biggest daily gains and five biggest falls of its 135-year history. | This month alone has seen the Dow having the five biggest daily gains and five biggest falls of its 135-year history. |
How will the stimulus work? | |
Many countries are now working on stimulus packages to support their economies, but these plans have received mixed responses from investors. | Many countries are now working on stimulus packages to support their economies, but these plans have received mixed responses from investors. |
The US rescue package follows five days of intense negotiations to try to agree a deal that will provide aid for American workers and businesses. | The US rescue package follows five days of intense negotiations to try to agree a deal that will provide aid for American workers and businesses. |
"At last we have a deal," Senate Majority Leader Mitch McConnell announced shortly before 02:00 Washington DC time on Wednesday morning. "In effect, this is a wartime investment," he added. | |
The full details of the planned legislation have not been published yet but lawmakers suggested on Tuesday that an initial proposal by Republicans for direct cash payments would be included. | |
The package of measures will help ease the pain of mass layoffs as businesses have been forced to close and employees ordered to stay at home. | The package of measures will help ease the pain of mass layoffs as businesses have been forced to close and employees ordered to stay at home. |
Is an end to the pandemic in sight? | |
Mr Trump said on Tuesday he hoped the US would shake off coronavirus within less than three weeks - even as New York Governor Andrew Cuomo warned the illness was spreading faster in his state than "a bullet train". | |
America is more than midway through a 15-day attempt to slow the spread of the virus through social distancing. | |
Nearly 19,000 people have died with coronavirus across the planet since it emerged in China's Wuhan province in January, and more than 420,000 infections have been confirmed. | |
Southern Europe is now at the centre of the pandemic, with Italy and Spain recording hundreds of new deaths every day. | |
Governments around the world have responded by locking down societies in the hope of slowing the spread of the virus. |