Asia mixed after US Senate OK’s virus aid

Investors await details of Washington’s plan

BEIJING, March 26, (AP): Asian stocks were mixed Thursday after the U.S. Senate approved a proposed $2.2 trillion virus aid package following a delay over its details and sent the measure to the House of Representatives.

Tokyo’s market benchmark shed 4.5% and Shanghai and Hong Kong also declined. Australia and Southeast Asian markets gained. Jakarta rose almost 10%.

On Wall Street, the future for the benchmark S&P 500 index was down 1.1%. That for the Dow Jones Industrial Average lost 0.8%. The S&P 500 rose 1.2% on Wednesday but is down nearly 27% from its peak a month ago.

The Senate approved the package to blunt the impact of business shutdowns due to the coronavirus outbreak late Wednesday despite arguments over whether it does too much or too little for companies, workers and health care systems.

The measure goes to the House, which is expected to approve it Friday.

The delay in approval “brings about a wait-and-see tone for markets,” said Jingyi Pan of IG in a report issued before the Senate approval.

The package, the biggest relief bill in U.S. history, is intended as relief for an economy spiraling into recession or worse due to an infection that has killed more than 21,000 people worldwide.

U.S. Treasury Secretary Steven Mnuchin, asked how long the aid would keep the economy afloat, said: “We’ve anticipated three months. Hopefully, we won’t need this for three months.”

Tokyo’s Nikkei 225 fell 4.5% to 18,664.60 and the Shanghai Composite Index dropped 0.6% to 2,765.66. The Hang Seng in Hong Kong declined 0.9% to 23,313.16.

The Kospi in Seoul lost 0.9% to 1,688.12 and Sydney’s S&P-ASX 200 added 2.3% to 5,113.30.

India’s Sensex jumped 4.2% to 29,739.44. The Jakarta benchmark rose 9.6% and other Southeast Asian markets also advanced.

Singapore’s benchmark lost 1%

A woman wearing face mask walks past a bank electronic board showing the Hong Kong share index at Hong Kong Stock Exchange on Thursday, March

26. Asian stock markets were mixed after Wall Street gained as US legislators wrangled over a proposed $2 trillion virus aid package. (AP)

after a government forecast the economy will shrink 10.6% in the current quarter compared with the three months ending in December. Singapore is preparing its second stimulus package as more businesses are told close and controls on public activity are tightened.

Global stock prices have swung wildly as business shutdowns spread around the world. Investors say they need to see a decline in numbers of new coronavirus infections before prices can bottom out.

Many traders have “reverted to the 2008 case study,” when markets saw several 5% rallies during the global financial crisis before bottoming out in March 2009, Chris Weston of

Pepperstone said in a report.

The U.S. aid package would be the country’s largest stimulus ever, but an early rally on Wall Street faded as disagreements over its details blocked a congressional vote, raising questions about when the plan might take effect.

Republican Sens. Tim Scott, Ben Sasse and Lindsey Graham demanded changes to ensure laid-off workers don’t receive more money than they did while working. Sen. Bernie Sanders said he would block the bill unless the conservatives dropped their objections.

The S&P 500 advanced to 2,475.66 and the Dow rose 2.4% to 21,200.55. The Nasdaq lost 33.56 points to 7,384.30.

Even optimists say the package provides just the second leg of three that markets need to regain lasting confidence.

Global central banks have cut interest rates and injected money into financial markets.

“They’re hitting on all the right elements of what the U.S. economy needs during the shutdown to bridge itself to the other side to open up economic activity,” said Darrell Cronk, chief investment officer of Wells Fargo Wealth and Investment Management.

But even optimists say the package provides just the second leg of three that markets need to regain lasting confidence. The Federal Reserve and central banks are also offering tremendous aid by cutting interest rates and supporting lending markets, but investors say they need to see the number of new infections peak before they can feel comfortable knowing how deep the looming economic downturn will be.

“There’s a lot of bad news, there’s very little tangible good news and there’s a lot of uncertainty in between,” said Jack Ablin, chief investment officer at Cresset.

Investors are still waiting to see the details of Washington’s plan. It includes direct payments to most Americans and aid for hard-hit industries. It’s unclear when the House of Representatives could vote on it.

“It’s too early to call a bottom because there’s way too much uncertainty,” said Tony Rodriguez, head of fixed income strategy at Nuveen.

“The bottom implies it’s not going lower, and I don’t think that,” he said. “For it to become a bottom, you would need to see much better news coming out on the health care side of this.”

The number of known infections has leaped past 450,000 people worldwide, and more than 20,000 have died, according to Johns Hopkins University. Overall, more than 112,000 have recovered.

For most people, the new coronavirus causes mild or moderate symptoms such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness including pneumonia and death.

Economists expect a report Thursday to show a record number of Americans filed for unemployment benefits.

Boeing soared 24.3% on Wednesday on expectations it stands to gain from the aid package. Other travel-related stocks also stormed higher to recoup a fraction of their losses. Royal Caribbean Cruises jumped 23% but is down 68.2% for the year.

Nike climbed nearly 9.2% after it said stronger online sales in China during the coronavirus outbreak helped it offset plunges in revenue caused by the shutdown of stores across the country. The company said it will follow a similar playbook in other countries as the outbreak has spread around the world. It also said sales are bouncing back in China, where the outbreak has eased and most Nike stores have reopened.

In energy markets, benchmark U.S. crude lost 33 cents to $24.16 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 48 cents on Wednesday to close at $24.49. Brent crude, used to price international oils, declined 23 cents to $29.76 per barrel in London. It rose 24 cents the previous session to $27.39 a barrel.

The dollar declined to 110.68 yen from Wednesday’s 111.20. The euro gained to $1.0905 from $1.0880.