Companies from Japan are famous all over the world. Toyota, Honda, Sony, and others play an important role in the modern world. However, the ongoing coronavirus outbreak had a dramatic impact on multinational corporations. Moreover, nobody knows for sure, how it would take to eradicate this virus. It may take several months if not more to solve this problem. Hopefully, policymakers in major economies are ready to unleash stimulus packages to support their economies. Let’s have a look at the stocks.
On March 2, Japan’s Nikkei 225 outperformed most stocks in the region. Its index gained 7.13% to end its trading day at 18,092.35. The shares of index heavyweight Fast Retailing jumped 13.79%. Moreover, shares of another heavyweight Softbank Group added 18.95%.
Meanwhile, the Topix index also had a good day. Its index rose 3.18% and reached 1,333.10.
South Korea’s Kospi index gained 8.6% to close at 1,609.97.
Importantly, mainland Chinese stocks saw significant gains on the day. The Shanghai composite index rose 2.34% to about 2,722.44. At the same time, the Shenzhen composite index gained 2.105% to around 1,666.22.
Australia’s S&P/ASX 200 rose 4.17% to close at 4,735.70.
Virus outbreak, Federal Reserve and stocks
Central banks in cooperation with governments are working hard to alleviate the risk factors. As a reminder, stocks in Asia as well and around the globe are under pressure due to coronavirus outbreak.
For example, two days ago, the Federal Reserve announced an open-ended asset purchase program. Furthermore, the Federal Reserve pledged to buy not only government and residential mortgages but for the first time plans to buy commercial mortgages as well.
The Federal Reserve promised to provide unlimited support for markets. On Tuesday, global stocks strengthened their positions.
At the moment, the main challenge is how to minimize the damage caused by a coronavirus. One of the options is to support companies as some of them may go bankrupt without financial aid.