Investors have cheered a huge stimulus bill agreed by US lawmakers aimed at supporting the economy during the virus crisis

London (AFP) - Opening trade in New York maintained the rally by global stocks Wednesday, as US lawmakers prepared to vote on a mammoth stimulus package to help the world’s biggest economy resist effects of the COVID-19 pandemic.

The Dow Jones index was up by 2.6 percent in early trading, helping pull most European markets along with it.

Frankfurt was the outlier, shedding 0.4 percent in afternoon trading.

Meanwhile, the dollar gained ground against other major currencies, while oil prices slipped lower.

“The stimulus is now by and large in place,” said Neil Wilson, chief market analyst at trading group

“The question is whether it’s enough for the markets.”

“All we can do is stay at home and hope that in six months, life has moved on and all of these stimulus efforts have protected people and businesses, and accelerated the recovery,” Craig Erlam, senior market analyst at OANDA Europe.

While COVID-19 continues to spread, traders gave a rare show of optimism after weeks of huge losses. Their eyes are fixed on Washington, where congressional leaders have thrashed out an emergency bill worth as much as $2 trillion – around 10 percent of US gross domestic product.

“At last, we have a deal,” Senate Majority Leader Mitch McConnell said, calling it a “wartime level of investment into our nation”.

“We have a bipartisan agreement on the largest rescue package in American history,” top Senate Democrat Chuck Schumer said shortly after McConnell spoke.

The bill was expected to pass the Senate as soon as Wednesday, but it was unclear whether the House of Representatives would be able to pass the proposal unanimously, potentially delaying enactment.

The measure would put cash directly into the hands of Americans, provide grants to small businesses and hundreds of billions of dollars in loans for corporations including embattled airlines, and expand unemployment benefits.

The prospect of such massive spending, combined with a Federal Reserve pledge to essentially print as much cash is needed, sent Wall Street into overdrive on Tuesday, with the Dow seeing its biggest rise since 1933.

The S&P 500 enjoyed its best day in more than a decade.

The gains then spread to Asia, which rallied for a second straight day.

Tokyo ended eight percent higher, with Japanese investors also relieved that the 2020 Olympics had been postponed rather than cancelled.

Hong Kong rose 3.8 percent, Shanghai was up more than two percent, while Singapore, Sydney and Manila rallied more than five percent and Seoul piled on more than four percent.

Adding to the more upbeat mood was a G7 promise to do “whatever is necessary”.

The unprecedented moves were part of a pedal-to-the-metal response to a rapid financial shock caused by the novel coronavirus pandemic, which has locked down countries and stunned the global economy.

Crude oil prices – which have been hammered by the outbreak’s impact on demand as well as by a tussle between Saudi Arabia and Russia – were lower again Wednesday but the drops were much more contained.

- Key figures around 1400 GMT -

London - FTSE 100: UP 1.7 percent at 5,536.63 points

Frankfurt - DAX 30: DOWN 0.4 percent at 9,666.74

Paris - CAC 40: UP 0.3 percent at 4,255.77

Milan - FTSE MIB: DOWN 1.6 percent at 16,678.18

Madrid - IBEX 35: UP 0.4 percent at 6,746.10

EURO STOXX 50: UP 0.2 percent at 2,720.68

New York - Dow: UP 2.6 percent to 21,244.77

Tokyo - Nikkei 225: UP 8.0 percent at 19,546.63 (close)

Hong Kong - Hang Seng: UP 3.8 percent at 23,527.19 (close)

Shanghai - Composite: UP 2.2 percent at 2,781.51 (close)

Brent North Sea crude: DOWN 0.2 percent at $26.92 per barrel

West Texas Intermediate: DOWN 0.8 percent at $23.82

Euro/dollar: DOWN at $1.0799 from $1.0782 at 2100 GMT

Dollar/yen: UP at 111.59 yen from 111.32 yen

Pound/dollar: DOWN at $1.1741 from $1.1754

Euro/pound: UP at 91.99 pence from 91.75