Coronavirus News Asia

Central banks’ strategies, reopening of economies creating hope


HONG KONG: Financial markets were buoyant ahead of key earnings and central bank meetings as investors tiptoed back to the market. Optimism is emerging as a growing number of governments talk about normalizing business activity and reopening their economies. This comes on the heels of a decline in new cases of Covid-19 infections and lower fatalities in many countries.

The Korean Kospi benchmark rose 0.59%, while Hong Kong’s benchmark Hang Seng index climbed 1.22% and the CSI 300 added 0.69%.

But the Nikkei 225 and the ASX 200 both dipped 0.1% as WTI prices dived 21% and Brent futures fell 4% on fears that the world is running out of oil storage capacity. Regionally, the MSCI Asia Pacific benchmark advanced 0.54%.

The European Central Bank sets policy on Thursday and markets will be keen to see if there is a further pledge to raise its asset purchase programme after it agreed last week to accept junk bonds as collateral for bank loans.

The Federal Reserve meeting is scheduled for April 28-29 – today and tomorrow – and although it is not expected to move on interest rates, financial markets will look for clues about how long rates will remain at these low levels and related asset purchase programmes.

The earnings season is focused on companies spelling out their business resumption plans and providing earnings visibility, as results are expected to be abysmal.

HSBC reported that its first-quarter profits halved after the coronavirus battered the global economy, despite central banks providing some respite in the form of reduced capital buffers and dividend stoppages.



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