Asian stocks regained a measure of calm Monday as markets rebounded after a searing sell-off last week and as traders pinned hopes on a likely coordinated global financial response to help soften the economic blow of the coronavirus pandemic.
European stock futures confirmed a higher opening for European markets, tracking gains in Asia.
The decisive turn came after world markets took a pounding last week as the coronavirus spread across many nations. Pandemic fears wiped out over $5 trillion from a major global equity index and stocks logged their most significant falls in over a decade.
The sheer scale of losses led financial markets to price in policy responses from the U.S. Federal Reserve to the Bank of Japan (BoJ) and the Reserve Bank of Australia (RBA).
Futures now indicate a full 50 basis point reduction by the Fed in March while Australian markets are pricing in a quarter-point cut at the RBA’s Tuesday meeting.
On Monday, investors had been encouraged by comments from the BoJ Governor Haruhiko Kuroda, who stated the central bank would make essential measures to stabilize financial markets.
MSCI’s broadest index of Asia-Pacific shares outside Japan surged 1%, up for the first time in four periods, and recovering from a fall of about 0.3% in early trade. However, the uptick barely covered for a 10% dive last week.
Euro Stoxx 50 futures, as well as German futures, rose 1.6%, while FTSE futures hiked 2.1%.
E-minis for the S&P500, which had been down over 1% at one point, had been last up 0.5%.
The dramatic spread of the coronavirus has prompted businesses worldwide to suspend travel, send workers home and cancel events, striking aviation stocks, gambling and tourism industries.