Stocks in the Asia Pacific region benefited from the U.S. Federal Reserve’s decision. For example, in South Korea, the Kospi index added 2.24% to close at 2,059.33. The country proposed to allocate an extra budget of 11.7 trillion Korean won ($9.86 billion) to tackle the coronavirus outbreak. This move helped to boost the Kospi index.
Furthermore, mainland Chinese stocks also saw gains on the day. The Shanghai Composite rose 0.63% to about 3,011.67. At the same time, the Shenzhen component was slightly higher at 11,493.02.
Hopefully, the Shenzhen composite also rose on Wednesday. Its index increased 0.361% to approximately 1,795.74.
The Caixin/Markit services Purchasing Managers’ Index (PMI) fell from 51.8 to 26.5 in January. Moreover, a private survey released on Wednesday showed China’s services sector reached the worst result on record in February.
Moreover, Hong Kong’s Hang Seng index rose 0.22% as of its final hour of trading.
In Japan, the Nikkei 225 closed slightly higher to 21,100.06. The Topix index ended its trading day 0.17% lower at 1,502.50.
Unfortunately, stocks in Australia declined, the S&P/ASX 200 fell 1.71% lower at 6,325.40.
Stocks and U.S. Federal Reserve
As mentioned above, stocks in Asia benefited from the decision of the central bank. On Tuesday, the country’s central bank decided to reduce interest rates by half a percentage point.
Interestingly, it was the first such emergency action coming in between scheduled meetings since the 2008 financial crisis. The next meeting will take place in two weeks.
On Tuesday, the Dow Jones Industrial Average closed 785.91 points lower at 25,917.41.
The S&P 500 declined 2.8% to end its trading day 3,003.37. At the same time, the Nasdaq composite dropped 3% to close at 8,684.09.
Coronavirus outbreak caused serious problems for the stocks across the world. U.S. Federal Reserve is trying to stabilize the situation.
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