Stimulus hopes pull stocks back from the abyss

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Global stocks have plunged, with coronavirus panic selling hitting nearly every asset class before finding some kind of floor as hopes turned to a US stimulus package.

European and US stock futures traded in positive territory and some of Asia's deepest losses were recovered by the end of Friday's sessions, in which tight liquidity exaggerated moves.

The turnaround came as central banks from the United States to Australia pumped liquidity into their financial systems and as hopes grew that US Democrats and Republicans could pass a stimulus package on Friday. "Based on the current information, we do not see the recent COVID-19 and/or oil price declines as permanent longer-term issues for the companies in the fund."By late afternoon, Hong Kong's Hang Seng was down 3.5 per cent and Korea's Kospi, which had busted through circuit-breakers earlier in the session, had recouped losses to sit 3.7 per cent in the red.

Majors stabilised after furious dollar buying overnight, with the euro finding footing about $US1.1200 and the Aussie recovering to $US0.6300.Emerging market currencies were punished: the won and baht dropped as far one per cent and the rupiah two per cent.

 

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