US President Donald Trump and the Senate have agreed an economic relief package worth more than $1.8tn, sending Asian shares higher.NiFildelity International
Markets had rocketed on Wall Street and London on Tuesday in anticipation of a deal being struck.
Asian shares also gained in Wednesday trading, with Japan’s benchmark Nikkei 225 index up 7.9% following the news.
The US stimulus package includes money to bailout industries that have been affected by the crisis.
In the US, the Dow Jones Industrial Average saw its biggest one-day gain since 1933 on Tuesday, although the deal hadn’t yet been signed.
In Asia, the Hang Seng in Hong Kong rose 3.1%, and China’s Shanghai Composite was up by 2% in Wednesday’s trading session.
“It’s good news, but we’re not out of the woods yet, ” said Tom Stevenson, investment director at fund manager Fildelity International.
“When markets are falling, you get these big rallies but you shouldn’t get stuck on that. They do bounce around in these situations.”
It continues a period of unprecedented volatility as markets react wildly to the economic impact of the coronavirus pandemic.
This month alone has seen the Dow having the five biggest daily gains and five biggest falls of its 135-year history.
On Wall Street, the Dow Jones Industrial Average surged by 11.4% on Tuesday, as it saw its biggest one-day gain since the Great Depression.Rescue package
Many countries are now working on stimulus packages to support their economies, but these plans have received mixed responses from investors.
The US rescue package is aimed at alleviating the economic impact of the coronavirus pandemic, and follows five days of intense negotiations to try to agree a deal that will provide aid for American workers and businesses.
“At last we have a deal,” Senate Majority Leader Mitch McConnell announced shortly before 2am Washington DC time. “In effect, this is a war time investment,” he added.
The full details of the planned legislation have not been published yet, but lawmakers suggested on Tuesday that an initial proposal by Republicans for direct cash payments would be included.
The near-$2tn package of measures will help ease the pain of mass layoffs as businesses have been forced to close and employees ordered to stay at home.