Global shares and Asian markets rally after Federal Reserve painted a rosy picture of the US economic outlook, repeating a pledge to stick to its guns with an ultra-low monetary policy.

Passersby wearing protective face masks following an outbreak of the coronavirus disease are reflected on a screen displaying stock prices outside a brokerage in Tokyo, Japan on  March 17, 2020.
Passersby wearing protective face masks following an outbreak of the coronavirus disease are reflected on a screen displaying stock prices outside a brokerage in Tokyo, Japan on March 17, 2020. (Reuters)

Asian shares have extended gains after the Federal Reserve said it was too early to consider rolling back emergency support for the economy, and US President Joe Biden proposed an $1.8 trillion stimulus package.

Asian and European markets rallied Thursday as traders welcomed blockbuster earnings from Wall Street titans with US markets set to open higher as well, with FTSE futures up 0.15 percent. E-mini futures for the S&P 500 index rose 0.53 percent and Nasdaq futures advanced 0.87 percent.

Biden proposed the sweeping new $1.8 trillion plan in a speech to a joint session of Congress on Wednesday, pleading with Republican lawmakers to work with him on divisive issues and to meet the stiff competition posed by China.

He also made an impassioned plea to raise taxes on corporations and rich Americans to help pay for what he called the "American Families Plan" in his maiden speech to Congress. He has also proposed nearly doubling the tax on investment income, which knocked stock markets last week.

Stephen Dover, Franklin Templeton's chief market strategist in California, said the effect of the tax package on markets is hard to measure for now.

"If it passes, I think it will have an impact on individual stocks that will pay a higher rate of tax or companies with founders that will pay capital gains and could sell stocks," he said. "I think investors are going to think about whether they want take their gains now and that creates the possibility of short-term volatility now."

London and Paris were well up in the morning though Frankfurt was flat.

The upbeat mood was helped by forecast-beating earnings reports from Apple and Facebook, two of Wall Street's biggest hitters, who essentially saw their profits double in the first quarter.

MSCI's broadest index of Asia-Pacific shares outside Japan built on early gains and was up 0.46 percent by mid-afternoon.

Australia's S&P/ASX 200 edged up 0.24 percent, as strong oil prices lifted energy stocks.

China's blue-chip CSI300 index was 0.45 percent higher, while Hong Kong's Hang Seng index rose half a percentage point. Seoul's KOSPI was flat while Taiwan shares rose 0.17 percent.

Markets in Japan were closed for a holiday but Nikkei futures rose 0.35 percent to 29,055 points.

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'It is not time yet'

For the rest of the day, investors will focus on the first estimate of US GDP for the first quarter, which is expected at 13:30 GMT.

Fed Chair Jerome Powell said on Wednesday that "it is not time yet" to begin discussing any change in policy after the US central bank left interest rates and its bond-buying programme unchanged, despite taking a more optimistic view of the country's economic recovery.

Excerpts of Biden's speech released in advance by the White House "hit the high points - big infra(structure) spend, talking climate action and vaccines," said John Milroy, investment adviser at Ord Minnett. "The Fed remains dovish, all very supportive."

Tech shares got a boost after Apple Inc on Wednesday posted sales and profits ahead of Wall Street expectations, though it warned a global chip shortage could dent iPad and Mac sales by several billion dollars.

Wall Street ended lower on Wednesday. The Dow Jones Industrial Average fell 0.48 percent to end at 33,820.38 points, while the S&P 500 lost 0.08 percent to 4,183.18.

The dollar pared up early losses against the yen to 108.61 and the euro gained 0.07 percent to 1.2132 following the Fed's decision to maintain supportive policies.

Oil prices extended gains on Thursday after rising 1 percent in the previous session as bullish forecasts for a demand recovery this summer offset concerns of rising Covid-19 cases in India, Japan and Brazil.

Brent crude for June rose 0.27 percent to $67.45 a barrel, while U.S. West Texas Intermediate crude for June was at $64.02 a barrel, up 0.25 percent.

Spot gold added 0.14 percent to $1,783.85 an ounce.

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