Oil prices rose sharply, WTI gaining 7.61% to 33.50 dollars and Brent taking 8.06% to 37.13 dollars.
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The major Asian stock markets rebounded Tuesday, relieved by the rise in oil prices after their crash the previous day and by new hopes of government budget measures to support the faltering global economy caused by the coronavirus.
Oil prices rose sharply around 6:15 GMT, a barrel of American crude WTI gaining 7.61% to 33.50 dollars and a barrel of Brent from the North Sea taking 8.06% to 37.13 dollars.
The two contracts had lost about 25% the day before, in the wake of the price war launched by Saudi Arabia after the failure of negotiations last weekend with Russia, causing a violent storm on Monday the world stock markets, already frightened by the coronavirus epidemic.
After a brief wind of panic at the start of the session, in the wake of the tumble from Wall Street the day before, the worst since 2008, the Tokyo Stock Exchange raised its head a little Tuesday.
Star index Nikkei closed Tuesday on a 0.85% gain at 19,867.12 points from a 5% dip the day before. The broader Topix index gained 1.28% to 1,406.68 points.
The Chinese stock markets were also in the green Tuesday at the end of the session. In Hong Kong, the Hang Seng index rebounded 2% around 6:45 GMT, while the Shanghai composite index gained 1.69% and the Shenzhen index 2.17%.
The financial centers of the Gulf oil states rebounded strongly at the opening on Tuesday, after several sessions of massive losses, driven by the recovery of oil prices on world markets. The Dubai Financial Market jumped 5.5% and that of Abu Dhabi 4.2%.
Hope for “large-scale” measures
The Tokyo Stock Exchange has also been comforted by the ebbing yen, which it is following like milk on fire.
The Japanese currency was indeed weakening against the dollar: around 6.30 GMT a dollar was worth 104.48 yen, against 102.74 yen the day before after the closing of the Tokyo Stock Exchange, benchmark for investors in Japan.
The yen appreciated considerably against the dollar on Monday, due to its safe haven status with investors, a move unfavorable for Japanese export-oriented companies.
Hopes of new “far-reaching” measures to support the US economy, promised Monday by Donald Trump, have also relieved investors in Asia.
The Japanese government is also expected to soon announce a financial assistance plan to deal with the economic consequences of the epidemic.
“The markets welcome this discussion of fiscal measures to support consumption and economic activity,” said Kiyoshi Ishigane, strategist at Mitsubishi UFJ Kokusai Asset Management, quoted by Bloomberg.
Investors also hope that the European Central Bank (ECB) will draw on Thursday a vast package of anti-crisis measures against the coronavirus, which risks undermining an already weakened eurozone economy.
The euro was worth 118.80 yen after 06:30 GMT, against 117.1 yen the day before. A euro was also traded for 1.1350 dollars, against 1.1458 dollars Monday at 19H00 GMT.
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