ASIAN equity markets were poised to gain today, tracking Wall Street’s rally after positive trial results of an experimental Covid-19 treatment, a US Federal Reserve pledge to shore up the economy and a jump in oil prices.
A top US health official said Gilead Sciences Inc’s antiviral drug remdesivir is likely to become the standard of care for Covid-19 after early results from a clinical trial showed it helped certain patients recover more quickly.
Investors expect the ensuing virus treatments to be critical in helping countries emerge from self-imposed lockdowns aimed at curbing the outbreak.
“The markets were up on expectation of the Gilead drug meeting the clinical end point, more regional re-opening in the US, and backstopping by the Fed after the chairman said that it will be overly accommodative,” said Thomas Hayes, chairman of Green Hill Capital.
Australian S&P/ASX 200 futures were up 2.02%, while Japan’s Nikkei 225 futures NKc1 were down 0.2% at 23:00 GMT.
The Nikkei 225 index closed down 0.06% at 19,771.19 on Tuesday. The futures contract is up 3.26% from that close. Japanese markets were closed for a public holiday yesterday. Hong Kong’s Hang Seng index futures were up 1.01%.
The US economy suffered its sharpest decline in 11 years, with first-quarter gross domestic product contracting 4.8%, marking the end of the longest US economic expansion on record.
At the conclusion of its two-day monetary policy meeting, the Fed left key interest rates near zero while Chair Jerome Powell warned the economy would drop at an “unprecedented rate” in the current quarter.
However, Powell also said the economy would pick up as restrictions were lifted and vowed the central bank would continue to support the recovery.
On Wall Street, the Dow Jones Industrial Average rose 2.21%, the S&P 500 gained 2.66% and the Nasdaq Composite added 3.57%.
The safe-haven dollar took a hit from rising risk appetite and the Fed’s pledge to shore up the US economy.
The dollar index, tracking the greenback against six major peers, fell 0.3%, with the euro up 0.5% to US$1.0872. Benchmark US 10-year notes fell 2/32 in price to yield 0.6143%, down from 0.61% late on Tuesday.
Oil prices surged more than 10% after US crude stockpiles grew less than expected and gasoline posted a surprise draw, feeding optimism that fuel consumption would recover as some European countries and US states ease coronavirus lockdowns.
US West Texas Intermediate (WTI) crude futures settled at US$15.06 a barrel, jumping US$2.72, or 22%. Brent crude futures settled at US$2.254 a barrel, up US$2.08, or 10.2%.
In Europe, automakers shares .SXAP were lifted after German carmaker Daimler forecast operating profit at its Mercedes-Benz Cars & Vans division above the prior-year level and rival Volkswagen said it expected to be profitable on a full-year basis. – April 30, 2020, Reuters.
