Thursday July 2nd, 2020 10:38AM

Asia stocks surge after Trump acquitted, China virus aid

By The Associated Press
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Asian stock markets surged Thursday after President Donald Trump was acquitted in an impeachment trial and China announced a tariff cut on U.S. imports and aid to businesses reeling from a virus outbreak.

Market benchmarks in Tokyo, Hong Kong and Seoul all rose more than 2%. Shanghai, Sydney and India also advanced.

Markets also were boosted by strong U.S. corporate earnings. That helped to dampen fears about the impact of sweeping Chinese efforts to contain a viral disease as the death toll rose.

“The markets are not only holding up, but they're going up!” said Stephen Innes of AxiCorp in a report. “To suggest risk appetite continues to ‘creep’ back in favor might be the biggest understatement of the week.”

Trump was acquitted after a rare trial before the U.S. Senate on charges of abuse of office following accusations he pressured Ukraine to investigate Joe Biden, a potential rival in this year's presidential election.

China announced tariff cuts on $75 billion of U.S. imports including auto parts in response to similar American reductions in a trade truce. That followed the signing of the “Phase 1” agreement in their fight over Beijing's technology ambitions and trade surplus.

Meanwhile, Chinese state TV said the government will cut value-added taxes and offer low-interest loans to help businesses weather a downturn caused by anti-virus measures that have depressed travel, retail sales and other industries.

Thailand's central bank cut its benchmark lending rate this week to help the country weather the loss of Chinese tourists. Brazil, a supplier of iron ore, soybeans and other commodities to China, also announced a rate cut.

Tokyo's Nikkei 225 jumped 2.4% to 23,873.59 and Hong Kong's Hang Seng gained 2.4% to 27,422.08. Seoul's Kospi rallied 2.9% to 2,227.94.

The Shanghai Composite Index gained 1.7% to 2,866.51.

Sydney's S&P-ASX 200 added 1.1% to 7,049.20 and benchmarks in Taiwan, New Zealand and most of Southeast Asia also advanced.

On Wall Street, the benchmark S&P 500 index hit a record high, driven by gains for health care and financial stocks.

The S&P 500 rose 1.1% to 3,334.69. The Dow Jones Industrial Average climbed 1.7% to 29,290.85. The Nasdaq composite gained 0.4% to 9,508.68, reaching a new high for a second day.

The impact of China's anti-virus measures on the second-largest global economy is unclear. Many stores, restaurants and cinemas are closed in an effort to reduce the risk the infection might spread. Companies are warning of lower revenue and profit.

Tesla plunged 17.2% on reports that the shutdowns in China will delay production at its Shanghai factory. The company warned investors last week that production delays in China were possible.

Investors got encouraging news about the U.S. economy on Wednesday when payroll processor ADP said that private U.S. companies added 291,000 jobs in January, a big increase from December.

Meanwhile, the Institute for Supply Management said its index of business activity by service sector companies increased in January, an indicator of continued steady expansion of the economy.

Versace parent Capri Holdings, CoverGirl owner Coty and health insurer Humana all rose after reporting strong earnings.

Ford slumped 9.5% after the automaker reported weak fourth-quarter earnings to cap off a disappointing year.

ENERGY: Benchmark U.S. crude rose 99 cents to $51.74 per barrel in electronic trading on the New York Mercantile Exchange. The contract advanced $1.14 on Wednesday to close at $50.75. Brent crude, used to price international oils, gained 82 cents to $56.10 per barrel in London. It added $1.32 the previous session to $55.28.

CURRENCY: The dollar advanced to 109.86 yen from Wednesday's 109.82 yen. The euro rose to $1.1004 from $1.0998.

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