By Tom West brook and Scott Murdoch Asian shares struggle SINGAPORE/HONG KONG (Reuters) – Asian shares struggled to find their footing on Wednesday and bonds held stunning gains, as an emergency rate cut from the U.S. Federal Reserve seemed to stoke rather than soothe fears over the corona virus’ widening global economic fallout.
The surprise 50 basis point cut, the Fed’s first off-schedule move since the depths of the financial crisis more than a decade ago, came with comments highlighting both the scale of the challenge and the limits of monetary policy.
Asian shares struggle
MSCI’s broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) rose 0.2%, though most of the gains were confined to South Korea where the government announced a big stimulus package.
European futures pointed to a steady open, with FTSE futures flat (FFIc1) and EuroSTOXX 50 futures up 0.3% (STXEc1).
After Wall Street tumbled overnight, futures for the S&P 500 (ESc1) rose 1.4% on the resurgent performance of Joe Biden in Democratic Party primaries. A moderate, Biden is now set up as the main challenger to self-described democratic socialist Bernie Sanders.
Currencies and bonds showed little such exuberance. The dollar remained on the back foot and the yield on benchmark 10-year U.S. Treasuries, which falls when prices rise, held at 0.9748% – not far over the once unimaginable low of 0.9060% hit overnight.