TOKYO (AP) – Asian stocks rose on Thursday due to optimism about the new US government, which previously triggered a spike in Wall Street.
There are high hopes that President Joe Biden’s government will mean more support for the struggling US economy, triggering a recovery that is crucial for the export-oriented Asian region.
Japan’s benchmark Nikkei 225 rose 0.7% in morning trading to 28,733.11. Australia’s S & P / ASX 200 gained 0.6% to 6,811.20, while South Korea’s Kospi rose 0.4% to 3,127.81. Hong Kong’s Hang Seng changed little, rising less than 0.1% to 29,974.00, while Shanghai Composite added 0.4% to 3,597.04.
Data released by the Japanese Ministry of Finance showed that the world’s third largest economy may be heading for a recovery, as December exports increased for the first time in two years, 2% over the same month last year. Imports fell 11.6%, marking the 20th consecutive month of falls.
Japan’s economy, like many others in the region, was hit by the coronavirus pandemic, which crushed tourism and economic and commercial activity. The Bank of Japan is holding a policy board meeting, but little change is expected by analysts. Tokyo and other urban areas in Japan are in a state of emergency, as coronavirus cases have recently increased.
On Wall Street, the S&P 500 rose 1.4%, beating its previous record set earlier this month. The Dow Jones Industrial Average, the Nasdaq compound and the Russell 2000 index of smaller companies also recorded high records, driven by gains in technology, communications, healthcare and many other sectors.
Biden had a flood of executive actions in his early hours as president. He also came up with a plan to inject an additional $ 1.9 trillion into the struggling economy, hoping to act quickly, as his Democratic party now controls the White House and the two houses of Congress.
The hope on Wall Street is that such a stimulus will help keep the economy going until the end of this year, when more widespread COVID-19 vaccinations will bring daily life closer to normal.
“Most of Wall Street is assuming that the second half (of 2021) is when we will see pent-up demand start to appear in the economy, and that will push economic indicators up and likely cause an increase in profit projections,” said Sam Stovall, CFRA’s chief investment strategist.
The S&P 500 rose 52.94 points to 3,851.85. The Dow Jones gained 257.86 points, or 0.8%, to 31,188.38. The Nasdaq rose 260.07 points, or 2%, to 13,457.25. The Russell 2000 rose 9.48 points, or 0.4%, to 2,160.62.
A better-than-expected start to the earnings reporting season also helped lift the US market. Analysts arrived with low expectations, predicting that the big S&P 500 companies will report a fourth consecutive drop in earnings per share because of the damage from the pandemic. But the vast majority of the first reports managed to exceed predictions.
Netflix jumped 16.9% to the biggest gain for the S&P 500 after announcing that it ended last year with more than 200 million subscribers. It had more revenue during the end of 2020 than analysts had expected, although its profits were below forecast.
Gains in stocks have accelerated since Biden’s election due to enthusiasm for the COVID-19 vaccines and possible economic movements. The bump in stocks between election day and Biden’s inauguration was greater than Trump’s bump between his election and inauguration.
“The market has risen more than 13% since election day,” said Stovall, noting that since World War II, the S&P 500 has risen an average of 3.5% in the first 100 days of a Democratic president’s administration, against a gain average of 0.5% when a Republican was in the White House.
Analysts have expressed concern about the high stock values heading for the latest round of corporate earnings, but they seem more reasonable amidst the historically low interest rate scenario, said Solita Marcelli, investment director for the Americas at UBS Global Wealth Management. Low rates, along with new stimuli and the continued launch of vaccines, are likely to help boost markets and the recovery.
“We think global growth will continue to increase,” she said.
In the energy trade, the US reference oil gained 26 cents, to $ 53.24 a barrel. Brent crude, the international standard, fell 19 cents to $ 55.89 a barrel.
In currency trading, the US dollar fell from 103.76 yen to 103.52 yen. The euro cost $ 1.2128, compared to $ 1.2134.
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AP business writers Stan Choe, Damian J. Troise and Alex Veiga contributed.