[Asia Economy reporters Jeong Hyunjin and Gu Eunmo] As the spread of the novel coronavirus disease (COVID-19) slowed somewhat in the United States and Europe, the New York stock market surged more than 7%. This was the result of eased market anxiety amid cautious expectations that the COVID-19 crisis may have reached its peak. Japan, where confirmed cases are rapidly increasing belatedly, declared a state of emergency and announced a large-scale economic stimulus package.
On the 6th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 22,679.99, up 7.73% (1,627.46 points) from the previous trading day. The S&P 500 index rose 7.03% (175.03 points) to 2,663.68, and the Nasdaq index closed up 7.33% (540.16 points) at 7,913.24.
The stock market rally was driven by signs of a slowdown in COVID-19 spread in the U.S. and Europe. The number of new COVID-19 deaths in New York State was 599 on that day, marking two consecutive days below 600 following 594 the previous day. The overall number of new confirmed cases in the U.S. is also slowing somewhat. New York Governor Andrew Cuomo cautiously expressed hope, saying, "The COVID-19 curve may be approaching its peak." In European countries with concentrated outbreaks such as Italy and Spain, new confirmed cases and deaths are decreasing, and some countries have mentioned the possibility of lifting lockdown measures such as movement restrictions. CNBC analyzed, "Data showing a slowdown in the daily increase of cases in the U.S. moved investors."
European and Asian stock markets also rose simultaneously. The UK FTSE 100 index and Germany’s DAX index rose 3.08% and 5.77%, respectively, while France’s CAC 40 index increased by 4.6%. The Korean KOSPI, which recovered the 1800 level after opening higher on the 7th, maintained a rise of around 1% in the early session. As of 9:45 a.m. that day, it recorded 1,810.63, up 1.05% (18.75 points) from the previous day. Japan’s Nikkei 225 index was trading at 19,011.52, up 2.34% as of 10:50 a.m., and China’s Shanghai Composite Index started up 1.56%.
However, negative views on the economic outlook still prevail in the market. Bloomberg Intelligence (BI), a research institution under Bloomberg, observed in its "Global Insights" report on the same day that the global economy’s growth rate in the first quarter (annualized) increased by 1.3% compared to the previous quarter. This is the lowest since the first quarter of 2009 during the global financial crisis. The report stated, "The global economy is declining at an unprecedented rapid pace," and predicted, "Growth forecasts will fall further in the coming months."
Meanwhile, the Japanese government declared a state of emergency targeting seven prefectures including Tokyo and Osaka in response to the sudden spread of COVID-19. Prime Minister Shinzo Abe held a press conference at 7 p.m. that day, announcing that the measure would take effect from midnight on the 8th. This measure will continue until the 6th of next month. The Japanese government also finalized an economic stimulus package worth 108 trillion yen (approximately 1,210 trillion won) to mitigate the economic impact of COVID-19 through a cabinet meeting held that day.
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