Asian stock markets chased Wall Street higher on Friday after US regulators lifted some limits on banks’ ability to invest.
Benchmarks advanced in Hong Kong, Sydney, and Southeast Asia, while Hong Kong declined. Chinese markets were closed for the holiday.
After the announcement by the Federal Reserve and other regulators that Wall Street closed higher, they would help ease regulations that limit banks’ investment capacity in hedge funds and some other sectors. This shift could help increase diluted bank profits after central banks cut interest rates to almost zero in response to the coronavirus epidemic.
Gaines was relatively small because Washington had not given more than expected, in a report AxiTrader Corp. Said Stephen Innes. He said the markets reacted “mildly,” similar to the Bank of England’s earlier decision to ease the policy.
“Investors are finding it difficult to see marginal or incremental new support,” Ince said. “Investors may need more major catalysts. Ideally, a vaccine. ”
Nikkei 225 in Tokyo rose 1% to 22,488.95, while Seoul’s Kospi rose 0.7% to 2,128.23. Hong Kong’s Hang Seng fell 0.4% to 24,671.06.
The S&P-ASX 200 added 1.1% to 5,879.50 in Sydney. New Zealand, Singapore, and Jakarta also advanced.
Analysts say investors are looking at a possible rebound from the deepest global recession since the 1930s and are trying to buy companies that will thrive after the epidemic ends. But they warn that the market may grow very rapidly and may be sustained from an uncertain economic outlook.
Asian economies are wrapping up their worst quarter since the 2008 financial crisis.
The Commerce Department reported on Thursday that the US economy shrunk by 5% in the first quarter. Forecasters expect a further decline during the quarter ending next week.
Investors in the United States have been encouraged by official steps to take anti-virus measures and allow businesses to reopen. But some states have reapplied the curb after a resurgence in new infections.
The hospital and cases have gained new heights in California, Florida, and Texas, suspecting its aggressive reopening. By the end of April, the daily number of confirmed cases of closure in the country peaked.
Asian governments are due to report on trade, factory production, and other indicators in June next week.
Prakash Sakpal of ING said in a report, “The outbreak of the second COVID-19 waves in some countries and the first-wave outbreak in others is not yet over.”
On Wall Street, the benchmark S&P 500 index rose 1.1% to 3,083.76 after falling 0.9% at one point. The benchmark index is on pace for its best quarter since 1998.
The Dow Jones Industrial Average rose 1.2% to 25,745.60. The Nasdaq, which hit a high earlier this week, rose 1.1% to 10,017.
Technology and health care stocks also helped lift the market, outpacing losses in utilities. Bond yield falls, a sign of caution.
The department store operator announced that it was retrenching 3,900 corporate employees or roughly 3% of its workforce.
On a more encouraging note, US factories for big-ticket goods were ordered to rebound from steep pullbacks in April and March last month as the economy reopened.
JPMorgan, Bank of America and Citigroup all rose more than 3% as investors pledged to the Fed and other bank regulators that sanctions imposed by the Volcker Rule created to curb banking excess after the 2008 crisis Will be easy.
After trading off, the Fed ordered the 34 largest US banks to suspend buybacks of their stock and cap dividend payments to Sept 30, so that they could shore up their hedges in case of a damaging recession.
The Fed said its annual “stress test” showed that banks would collectively suffer a $ 700 billion loss in the worst-case scenario.
In energy markets, benchmark US crude rose 43 cents to $ 39.15 a barrel. It closed at $ 38.72 a barrel on Thursday. Brent crude, the international oil price standard, added 41 cents to $ 41.53 per barrel in London. It closed at $ 41.05 in the previous session.
The dollar fell to 107.14 yen from Thursday’s 107.23 yen. The euro was slightly changed at $ 1.1222