Global stocks rebound as investors bet central banks will act over the coronavirus - CNN

Stocks in Asia started the day lower following a massive — albeit temporary — plunge in US stock futures. Japan's Nikkei 225 (N225) was deep in the red before Bank of Japan Governor Haruhiko Kuroda promised that the country's central bank would provide "ample liquidity" to ensure stability in financial markets.

On that, the benchmark index began creeping higher, eventually closing up nearly 1%.

Other indexes in Asia ended the day higher, too. South Korea's Kospi (KOSPI) closed up 0.8%, while Hong Kong's Hang Seng Index (HSI) finished up 0.6%. China's Shanghai Composite (SHCOMP) was nearly 3.2% higher.

Trillions were wiped off stocks worldwide last week as markets suffered their worst rout since the global financial crisis of 2008.

It's not just the Bank of Japan that stands ready to act. Investors believe the US Federal Reserve will cut rates at its meeting later this month, according to the CME's FedWatch Tool. Just last month, markets gave only an 11% chance of that happening.

The world's central banks may take even more dramatic actions, according to Bill Nelson, executive vice president and chief economist at the Bank Policy Institute. In a note this weekend, he predicted a "coordinated easing across the major central banks," possibly including the People's Bank of China and the Hong Kong Monetary Authority, as early as this week.

"The global nature of the problem calls for a global response, a coordinated easing avoids the risk of competitive devaluations, and the coordinated actions during the financial crisis were considered especially helpful," Nelson added.

The positive sentiment in Asia on Monday also carried into Europe. The FTSE 100 (UKX) jumped 1.5% at market open. Germany's Dax and France's CAC 40 both opened between 1% and 2% higher.

US stock futures also almost completely reversed course. Dow (INDU) futures, which at one point plunged more than 500 points Sunday night, were last up more than 450 points, or 1.8%. S&P 500 (INX) and Nasdaq Composite (COMP) futures were also up 1.6% or higher.

The coronavirus outbreak has been weighing on the global economy and on markets. There have now been 85,000 reported cases of the disease, which has reached every continent except Antarctica.

And all three major US stock indexes posted their worst weekly percentage drops since the financial crisis. The energy market, crude oil, gold and Treasury yields all slipped last week, too.

-- Kaori Enjoji contributed to this report.

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https://www.cnn.com/2020/03/01/investing/dow-futures-coronavirus/index.html

2020-03-02 08:33:00Z
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