The equity indices in the Asian region were broadly higher late Thursday morning as sentiment improved. There are reports that a possible Covid-19 virus cure could be close at hand.
Sentiment also rose as more countries are starting to reduce lockdown orders. However, gains are being capped as economic data is not pretty.
The headlines Asian benchmark, the Nikkei 225 resumed trading after a public holiday to gain over two percent. The financial markets in South Korea and Hong Kong are closed for a public holiday today.
In Japan, the headline Nikkei 225 was up 2.49 percent. Shares of robotics manufacturer Fanuc gained six percent. In Tokyo, the broader Topix index added 1.65 percent.
Elsewhere in the Asian and Pacific Rim, the Australian S&P ASX 200 added over 1.3 percent. Most of this index’s sub-sectors were in the green.
The indices on the mainland in China were higher by the end of the morning, Hong Kong time. The Shanghai composite added 0.8 percent and the smaller Shenzhen composite added 0.84 percent.
Asian Traders wait on today’s ECB Monetary Policy Decision
The euro is trading quietly before today’s monetary policy and interest rate decision from the European Central Bank.
The ECB is likely to keep rates steady today. However traders are expecting the ECB to extend their asset purchase program, quantitative wising (QE) to include junk bonds. They will also introduce other non-standard monetary policy measures.
Traders Digest News that the U.S. Economy Contracts
The U.S. economy has contracted in the first quarter at its fastest pace since the great depression.
The first quarter gross domestic product (GDP) contracted by 4.8 percent and economists think that this is just the beginning. The economic growth data for the second quarter could be even worse.
Economists also believe that U.S. consumer spending will take several months to recover from the coronavirus blow as there have been massive job layoffs. This also dampens consumption which makes up about 70 percent of their GDP.
Later today, the United States will publish weekly unemployment claims data for the week ending 24 April.