Japan stocks gain about 3% as Dow sees largest 3-day surge in almost 90 years

Stocks in Asia were higher in Friday afternoon trade after the Dow Jones Industrial Average soared overnight to its biggest 3-day surge since 1931.

In Japan, the Nikkei 225 advanced 2.95% in afternoon trade while the Topix index gained 2.94%. South Korea’s Kospi was up 2.05% while the Kosdaq index rose 3.05%.

Mainland Chinese stocks were higher by the afternoon, with the Shanghai composite rising about 1.4% while the Shenzhen composite added 1.113%.

Meanwhile, stocks in Australia remained in negative territory, with the S&P/ASX 200 down 2.35%.

Overall, the MSCI Asia ex-Japan index rose 1.63%.

On the economic data front, China’s industrial profits for January-February plunged 38.3% year-on-year, according to the country’s National Bureau of Statistics. The period covered by the data release coincided with lockdowns announced by the Chinese government to combat the spread of the coronavirus in the country, where the disease was first reported.

“I think the data’s probably gonna come in … really bad in Q2 for majority of the global economy,” Cedric Chehab, head of country risk and global strategy at Fitch Solutions, told CNBC’s “Squawk Box” on Friday. “Although equity markets and financial markets typically bottom before the economy does, it feels a little bit sudden or a little bit quick … for the markets to be bottoming.

“(We’re) still seeing a very large increase in the number of COVID-19 cases globally and we really haven’t seen … the curve flatten yet,” Chehab said.

A surge in reported infections in recent days has made the U.S. the country with the largest number of confirmed coronavirus cases. Globally, more than 531,800 have been infected while at least 24,000 lives have been taken, according to data compiled by John Hopkins University.

Overnight stateside, the Dow skyrocketed 1,351.62 points to close at 22,552.17, capping its biggest three-day surge since 1931. The S&P 500 also posted a three-day winning streak, rising 6.2% to end its trading day at 2,630.07. The Nasdaq Composite advanced 5.6%  to close at 7,797.5.

The U.S. Senate unanimously passed a historic $2 trillion coronavirus relief package Wednesday night, with the stimulus bill now headed for the House, which will push to pass it by voice vote Friday morning. House speaker Nancy Pelosi, D-Calif., said the bill will be passed “with strong bipartisan support.”

Still, jobless benefit claims in the U.S. had soared to 3.28 million last week, according to the Labor Department — by far a record. That, however, was still lower than the most dire estimates on Wall Street.

Meanwhile, U.S. Federal Reserve Chairman Jerome Powell said Thursday that the central bank will not “run out of ammunition” to keep the economy stable.

“We judge markets are pricing‑in a short sharp US recession,” Joseph Capurso, senior currency strategist at Commonwealth Bank of Australia, wrote in a note. “Our fear is the surge in jobless claims – even if the benefits paid will soon be increased – will draw-out the recession longer than markets expect.”

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 98.844 after falling from levels above 100 yesterday.

The Japanese yen traded at 108.45 against the dollar after strengthening from levels above 110 yesterday. The Australian dollar changed hands at $0.6111 after seeing levels below $0.58 earlier in the trading week.

Oil prices were higher in the afternoon of Asian trading hours, with international benchmark Brent crude futures up 1.03% to $26.61 per barrel. U.S. crude futures also advanced 1.99% to $23.05 per barrel.

CNBC’s Fred Imbert contributed to this report.

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