Industry
Asian markets are expected to rise on Thursday after U.S. stocks closed at higher levels than hopes that U.S. President Joe Biden, freshman, would exert more economic stimulus to counteract past damage damaged by COVID-19 pandemic.
PHOTO FILE: One stands in front of a screen showing Nikkei share averages and world stock indices outside of a breakout, amid the coronavirus outbreak (COVID-19), in Tokyo , Japan 30 December 2020. REUTERS / Issei Kato
SHANGHAI: Asian stocks hit record highs on Thursday as investors hoped the incoming Biden administration will be able to overcome a major new stimulus package to reverse the economic devastation of the COVID pandemic -19 reduce.
Republicans in the U.S. Congress have indicated they are willing to work with President Joe Biden on the top priority of his administration, the US $ 1.9 trillion fiscal stimulus plan, but some are against the tag price. Democrats took control of the U.S. Senate Wednesday, though they still need Republican support to get past the program.
But after an all-time high closure on Wall Street on Wednesday, markets in Asia were showing relief over an orderly transition of power and strong expectations that U.S. stimulus will continue to support global assets.
European shares traded, with Euro Stoxx 50 futures up 0.39per percent, German DAX futures up 0.4per percent and FTSE futures up 0.6per percent.
Kay Van-Petersen, global strategic macro at Saxo Capital Markets, said Democratic control of the Senate “increases not only more fiscal probability (stimulus), but magnitude.”
“That means this market should be way, means, way higher overall and we are going to reach. We are entering this regime of more asset class inflation accelerator, “he said.
MSCI’s broadest index of Asia-Pacific shares outside Japan hit highs and eventually rose 0.92per percent, with markets across the region posting gains.
Chinese blue chips rose 1.75per per cent, Australian shares rose 0.79per per cent and Kospi Seoul rose 1.54per per cent.
Japan’s Nikkei rose 0.82per percent, less than 1per percent off a three-year high reached last week.
The highs in Asia followed the highest highs on Wall Street overnight. The Dow Jones industrial average rose 0.83per per cent, the S&P 500 gained 1.39per per cent and the Nasdaq Composite added 1.97per per cent. On Thursday, e-mini futures for the S&P 500 were heading up to new records, eventually reaching 0.34per percent higher.
“The market continues to take a risky view of tighter regulatory / tax risks due to the narrow majority of the Senate, while still expecting further fiscal stimulus,” said Tapas Strickland, an economist at the National Bank of Australia. , in a note.
Tech shares stood out after Netflix Inc. said it would no longer have to borrow billions of dollars to fund its TV shows and movies, prompting a nearly 17per percent increase in its shares.
Along with Netflix, the rest of the group gathered FAANG, which was expected to report results in the coming weeks. Google Alphabet Inc’s parent rose 5.36per percent.
As equity gases rise, U.S. stimulus hopes to weigh on the green, pushing the dollar index down 0.17per percent to 90.254.
The dollar fell 0.14per percent against the yen at 103.37 and the euro gained 0.25per percent on the day to US $ 1.2134.
10-year U.S. 10-year benchmark notes yielded 1.0785per percent, down from the U.S. close of 1.09per percent on Wednesday.
In commodity markets, oil prices fell on an unexpected rise in U.S. crude stocks, although hopes for economic recovery kept losses in check. US West Texas intermediate crude fell 0.24per percent to US $ 53.18 per barrel. Brent crude fell 0.16per percent to US $ 55.99 per barrel.
Spot gold rose 0.15per percent to US $ 1,873.77 an ounce.
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(Reporting by Andrew Galbraith in Shanghai; Additional report by Jessica DiNapoli in New York; edited by Richard Pullin & Shri Navaratnam)