Global Fundamental Analysis 26/03/2020

Australian Market

Australian shares closed 5.5% higher to post consecutive gains for the first time in five weeks.
The benchmark S&P/ASX 200 jumped more than 6% in early trade after U.S. stocks surged as lawmakers in Washington made progress toward a giant stimulus package to mitigate the economic effects of the coronavirus pandemic.

It slipped back and was just 1.3% higher before a late surge to close at 4998.1, its best close since March 17. Beaten down Afterpay and Qantas were the best performing ASX 200 stocks, soaring 34% and 26%, respectively. U.S.-exposed Afterpay apparently benefited from stimulus hopes, while Qantas secured A$1.05 billion of new debt funding.

US Market

U.S. stocks soared in frenetic trading, heading for their first back-to-back gains since February, after lawmakers and the White House reached an agreement on a $2 trillion stimulus package.

The Dow Jones Industrial Average jumped 1,147 points, or 5.5%, to 21852, extending a rally that propelled it to its biggest one-day advance since 1933 just a day earlier. The S&P 500 was up 4.3% and the Nasdaq Composite climbed 2.4%.  Investors have been eager to see the government commit to further aid for the economy as the growing coronavirus pandemic has shut factories, sent students home from universities and upended travel for millions of Americans. The pending legislation is likely to include direct financial payments to many Americans, as well as loans to businesses-reassuring some who have been worried about the economic fallout from the
pandemic.

Commodities

Gold prices settled lower, giving up some gains from a day earlier when bullion registered its largest percentage rise in more than a decade.  Some commodity analysts attributed the retrenchment to some exhaustion after two powerful sessions of gains for the yellow metal, as the U.S. Congress draws closer to
passing a $2 trillion rescue package to help lessen the economic pain of the coronavirus pandemic.

Oil Futures

U.S. oil prices notched a third consecutive increase, ending 2% higher at $24.49/bbl, which put them 8.7% higher for the week as they try to end a four-week-streak of weekly declines.  WTI’s gains were fueled by rising U.S. equities and expectations for a massive stimulus package to confront a coronavirus-caused economic slump.

Forex

The dollar was slightly lower as Congress moved toward passing a $2 trillion stimulus bill, extending a recent stretch of stability that comes after big gains earlier in the
month.

European Markets

European stocks rose as the German and U.S. governments took fiscal policy action to limit the economic impact of coronavirus. The Stoxx Europe 600 rose 3.1%, the FTSE 100 gained 4.5%, the DAX advanced 1.8% and the CAC-40 increased 4.5%.

The German government announced a rescue package worth over EUR750 billion while U.S. lawmakers agreed to a $2 trillion spending bill to shore up the economy during the coronavirus pandemic.

Asian Markets

Asian stocks rose after U.S. lawmakers and the Trump administration reached an agreement on a $2 trillion stimulus package in response to the coronavirus pandemic.
Mainland China shares sustained a second day of solid recovery from a global selloff earlier amid the escalating coronavirus pandemic. The benchmark Shanghai Composite Index rose 2.2% to 2781.59 while the Shenzhen Composite Index gained 2.9% to 1714.86. The ChiNext Price Index, which measures the performance of startups and emerging industries, increased 3.3% to settle at 1937.85. Automobile stocks led the upturn, following a slew of policies by local governments aimed at supporting the industry.

Japan’s Nikkei Stock Average soared 8.0% to close at 19546.63, posting the biggest percentage-point gain since October 2008. The Nikkei closed at the highest level since March 10, led by gains in real estate and steel stocks.

South Korean stocks gained for a second session on fresh stimulus hopes, led by tech, airline, chemicals and auto companies. The benchmark Kospi ended 5.9% higher at 1704.76. Uncertainties remain but the initial sell-down wave to secure liquidity may be over. A series of stimulus measures at home and abroad to stem the fallout from
the coronavirus buoyed sentiment.