HK, Regional Shares Surge On Fed Measures

Hong Kong stocks went into the break more than three percent higher on Tuesday as traders welcomed a pledge by the US Federal Reserve to buy an unprecedented amount of bonds to help the US economy weather the virus crisis.

The Hang Seng Index rose 3.6 percent, or 772 points, to 22,468.

There were more moderate gains in mainland shares, with the benchmark Shanghai Composite Index up 1.5 percent at 2,699 points. The Shenzhen Component Index gained 1.4 percent to 9,824 points at midday.

However, traders elsewhere in the region gave a massive thumbs up to the US central bank's pledge to essentially print cash in a move not seen since the global financial crisis more than a decade ago.

The Fed, which has already slashed interest rates to record lows, said it will buy unlimited amounts of Treasury debt and take steps to lend directly to small- and medium-sized firms hammered by a lockdown across the country.

Tokyo ended the morning 6.7 percent higher.

The Nikkei was given extra lift by a Bank of Japan decision to embark on its own massive bond-buying scheme.

Seoul was up more than six percent, Singapore rose more than four percent, and Wellington and Taipei surged more than five percent apiece. Sydney gained three percent, while Jakarta and Manila were up more than one percent.

AxiCorp's Stephen Innes called the Fed move "the most significant monetary experiment in the history of financial markets".

"Asian investors like what they see from an all-in Fed, which is being viewed in a very impressive light for both Main and Wall Street, even as the US congress dithers," he added.

With an expected flood of dollars into financial markets, the greenback suffered a rare sell-off, having surged for the past few weeks. It lost almost four percent against the Australian dollar, three percent against the New Zealand dollar and more than one percent to the South Korean won, Russian ruble and Turkish lira.

The weaker dollar also helped lift crude, which has been hammered to multi-year lows by a crash in demand owing to the global lockdown as well as a price war between producers Saudi Arabia and Russia. (AFP)