- Global stocks gained on Monday after the Bank of Japan bolstered its economic stimulus.
- Investors also cheered reports that national governments, especially those in Europe, are set to ease lockdown restrictions in the coming weeks.
- However, China’s industrial profits collapsed 37% to $110 billion in the first quarter of the year, with the energy and automotive sectors contracting the most.
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Global stocks rose Monday after the Bank of Japan ramped up its monetary stimulus in response to the coronavirus outbreak.
The central bank committed to a multi-pronged asset purchase plan, signaling its intention to mitigate the economic fallout from the pandemic. It quadrupled its maximum purchases of additional corporate bonds and commercial paper – unsecured, short-term debt – to about 20 trillion yen ($186 billion) in total.Â
“The Bank of Japan laid down the gauntlet to the Federal Reserve and European Central Bank, who both meet later this week,” Neil Wilson, chief market analyst for Markets.com, said in a morning note.
Investors also cheered reports that governments, including those of Italy and Spain, could loosen nationwide lockdowns in coming weeks.
“The sentiment was positive in Asian markets due to the fresh bazooka from the Bank of Japan and the fact that authorities around the globe have started to ease off some of the restrictions around coronavirus,” Naeem Aslam, chief market analyst at AvaTrade, said in a morning note.
More worryingly, China’s Bureau of National Statistics announced that profits at big industrial firms declined 37% to 782 billion yuan ($110 billion) in the first quarter as the coronavirus forced authorities to shut factories and hammered demand for industrial products.
Chinese oil and gas profits also declined sharply to 102 billion yuan ($14 billion), and the automotive sector also suffered.
Here’s the market roundup as of 11:30 a.m. in London (6:30 a.m. ET):
- European equities rose, with Germany’s DAX up 2.5%, Britain’s FTSE 100 up 1.4%, and the Euro Stoxx 50 up 2.2%.
- Asian indexes climbed with China’s Shanghai Composite up 0.3%, Hong Kong’s Hang Seng up 1.9%, and Japan’s Nikkei up 2.7%.
- US stocks are set to open higher. Futures underlying the Dow Jones Industrial Average, the S&P 500, and the Nasdaq rose between 0.9% and 1.9%.
- Oil prices fell, with West Texas Intermediate down 16.5% at $14.20,Â and Brent crude down 4.3% at $23.80.
- The benchmark 10-year Treasury yield rose to about 0.62%.
- Gold dipped 0.1% to $1,734.
- Bitcoin rose about 0.6% to roughly $7,690.