Global stocks extended their rally on Thursday as traders took heart from China’s pledge of tariff cuts on US goods, with European and US shares hitting record highs and Asian indices continuing to recover from a deep sell-off earlier this week. China has announced it will halve tariffs on some US imports as it moves to implement a “phase one” trade deal with the Trump administration and cushion the economic fallout from the coronavirus epidemic.
The S&P 500 and Dow Jones hit record highs at the open on Wall Street, as they both rose 0.3 per cent. Hong Kong’s Hang Seng index rose 2.6 per cent on Thursday, its best one-day performance since early September. Tokyo’s Topix closed 2.1 per cent higher, putting the index back into positive territory for 2020.
The CSI 300, China’s gauge of Shanghai- and Shenzhen-listed blue-chip stocks, ended the day up 1.9 per cent. It was the third session in a row of gains for Asian markets following a sharp sell-off in mainland Chinese shares on Monday, prompted by the coronavirus outbreak. European shares also moved higher, with the Stoxx 600 up 0.3 per cent after hitting a record high in early trading. In London, the FTSE 100 rose 0.3 per cent by lunchtime. China’s National Health Commission said on Thursday the death toll in the country had exceeded 500, with the number of confirmed coronavirus cases rising past 28,000 as of February 5.
The vast majority of new deaths occurred in the city of Wuhan and the surrounding Hubei province, the centre of the outbreak. Tough conditions in Hong Kong lifted the value of some consumer goods sellers. Hong Kong-listed Vinda International — a Guangdong-based maker of hygiene goods — rose as much as 8 per cent, while noodle-maker Nissin Foods gained as much as 6 per cent. That was after shoppers in the territory cleared supermarket shelves of such goods amid speculation of an impending shortage due to the coronavirus outbreak. “Investors want to put money to work, it’s almost like they’re dying to get back into the market knowing this too shall pass,” said Stephen Innes, chief market strategist at AxiCorp, pointing to pent-up demand from traders despite the coronavirus contagion. Julian Evans-Pritchard, a China economist at research company Capital Economics, said concerns over the coronavirus outbreak may have played a role in China’s decision to cut tariffs. “Given everything else that’s going on they don’t want trade tensions to flare up again.”
