Asian shares rise on hopes for drug to treat coronavirus

 Asian shares vanced on Thursday, riding a wave of optimism about a possible treatment for coronavirus that set off a rally on Wall Street powerful eugh to override data showing U.S. ecomy h logged its worst quarterly performance since 2009.

Japan's benchmark Nikkei 225 surged 2.1% to finish at 20,193.69, while Australia's S&P/ASX 200 gained 2.4% to 5,522.40. Shanghai Composite ded 1.3% to 2,859.56. Markets in South Korea and Hong Kong were closed for holidays.

India's Sensex gained 3% to 33,700.35. Markets in Taiwan and Souast Asia also vanced.

On Wall Street, upswell of hope about curbing virus outbreak was so strong that investors completely sidestepped report showing U.S. ecomy shrank at a 4.8% annual rate in first three months of year.

S&P 500 vaulted 2.7% higher, extending a rally that’s brought U.S. stock market to brink of its best month in 45 years.

spark for Wednesday’s rally was a report that experimental drug remdesivir proved effective against new coronavirus in a study run by National Institutes of Health. nation’s top infectious diseases expert said drug reduced time it takes patients to recover, and it raised hopes that life around world may eventually tiptoe back toward “rmal.”

“With refreshed optimism on Covid-19 end, Asia markets can likewise be seen charging ahe into what will be end of week for many markets in region.” said Jingyi Pan, a market strategist for IG in Singapore.

Also boosting sentiments were some data out of China that appeared to show recovery from ecomic dam over virus outbreak may be coming grually.

Manufacturing activity contracted at its fastest pace on record in February after Beijing shut down much of ecomy to fight virus, which emerged in December in central China.

Activity rebounded in March but forecasters warn manufacturers might face a second dip due to a possible second wave of outbreak.

S&P 500 rose 76.12 points to 2,939.51. It has surged 13.7% in April, and is a day away from closing out its best month since late 1974.

Dow Jones Industrial Aver rose 2.2% to 24,633.86, and Nasdaq climbed 3.6% to 8,914.71.

“What you’re finding w is you have this debate between optimism and realism,” said am Taback, chief investment officer for Wells Fargo Private Wealth Manment.

Federal Reserve said Wednesday that it expects health crisis to weigh on ecomy “over medium term,” as it promised to keep in place massive amounts of aid and interest rates at nearly zero. Oil prices, bonds and or markets besides stocks have also been dominated in recent weeks by worries about ecomic impact of virus outbreak.

“Everything except equities is telling you things are t great,” Taback said. “This market is overly optimistic.”

Job losses have exploded since early April, as layoffs sweep nation following widespre stay-at-home orders, and ecomists expect to see even worse numbers for second quarter of year.

first quarter figure was “merely tip of iceberg,” said Michael Reylds, investment strategy officer at Glenmede.

But stocks have been rallying over last month as investors look beyond current ecomic devastation, focusing inste on prospect of ecomies grually reopening. Some U.S. states and nations around world have laid out plans to relax restrictions keeping people at home and businesses bereft of customers. Any new treatment for COVID-19 could also lower dre so prevalent among households and businesses around world.

But what got 31.4% rally for S&P 500 started in late March was massive aid from Federal Reserve and Congress. Fed on Wednesday said it wouldn’t be pulling back on aid anytime soon.

smallest stocks have shown largest degree of optimism. Russell 2000 index of small-cap stocks jumped 4.8% Wednesday and is up 10.4% this week alone, more than double gain for indexes of bigger stocks.

Many professional investors are skeptical of U.S. stock market’s big rally. re’s still a lot of uncertainty about how long recession will last. Even if re is a quick rebound for ecomy and profits, it may take a while for households and businesses to get back to how things used to be.

“My concern is that market is starting to get a little bit more focused on rewards and less focused on risks right w,” said Sal Bru, chief investment officer at IndexIQ. “Maybe investors are getting a little too enthusiastic.”

“I don’t think you just flip switch and everybody goes back to work right away,” he said.

Oil prices are continuing ir extreme swings after a collapse in demand has sent crude stor tanks close to ir limits.

Benchmark U.S. crude oil rose $1.55 to $16.61 a barrel in electronic tring on New York Mercantile Exchange. It rose $2.72, or 22%, to settle at $15.06 a barrel Wednesday. Brent crude oil, international standard, rose $1.34 to $23.88 a barrel.

U.S. dollar inched down to 106.57 Japanese yen from 106.67 yen Wednesday. euro slipped to $1.0858 from $1.0875.