Investors React to US Coronavirus Aid Package

Vehicles are reflected in a window while electronic dashboards display share information on the Australian Stock Exchange, operated by ASX.

Lisa Maree | Bloomberg | fake images

SINGAPORE – Asia-Pacific markets were mixed on Monday as investors reacted to last week’s US employment report, which beat expectations and fueled hopes for a faster economic recovery.

Australian stocks were in the green, but they pulled back some of their previous gains. The benchmark ASX 200 index was up 1.06% as most sectors traded higher, and the heavily weighted finance sub-index added 1.05%. Major banking and mining stocks were up: Commonwealth Bank shares were up 1.46%, Rio Tinto’s up 3.6%, Fortescue’s up 1.13% and BHP’s up 2.63 %.

In Japan, the Nikkei 225 was up 0.21% as bank stocks rallied. Shares of Mitsubishi UFJ Financial Group gained 3.31%, Sumitomo Mitsui Financial Group added 2.48% and shares of Nomura were up 4.2%. On the other hand, the Topix index added 0.46%.

Meanwhile, South Korea’s Kospi gave up previous gains to trade down 0.32%. In Hong Kong, the Hang Seng Index fell 1.43% while the Hang Seng Tech Index fell 3.77%.

Mainland Chinese stocks also fell: the Shanghai composite fell 0.2% while the Shenzhen component lost 1%.

Monday’s session in Asia-Pacific followed a wild day in US markets last Friday, where stocks rebounded from a strong sell-off while stronger-than-expected non-farm payrolls reported improved optimism for faster economic recovery.

“Investors are wary of the impact Biden’s massive tax experiment will have on longer-term interest rates, creating a fragile equity environment,” analysts at ANZ Research said in a morning note Monday. “That defensive attitude may prevail at the mid-March meeting (Federal Open Market Committee).”

US aid package

The United States Senate approved a $ 1.9 trillion coronavirus aid package over the weekend that includes direct payments of up to $ 1,400 to most Americans. The bill is expected to pass this week in the Democratic House of Representatives and send to President Joe Biden for his signature before the March 14 deadline to renew unemployment assistance programs.

Last month, Fed Chairman Jerome Powell told lawmakers that the US economy was a long way off its employment and inflation targets and it will likely take time to make further substantial progress. He said inflation is still “soft” and that the Fed was committed to current policy, implying that interest rates are likely to remain low for now.

Coins and oil


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