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TOKYO (AP) – Asian stocks rose on Thursday amid optimism over the new U.S. administration that sparked a rally on Wall Street.
Hopes are high that President Joe Biden’s administration will mean more support for the struggling US economy, triggering a crucial recovery for the export-driven Asian region.
Japan’s benchmark Nikkei 225 rose 0.7% in the morning session to 28,733.11. Australia’s S & P / ASX 200 gained 0.6% to 6,811.20, while South Korea’s Kospi edged up 0.4% to 3,127.81. The Hong Kong Hang Seng was little changed, advancing less than 0.1% to 29,974.00, while the Shanghai Composite added 0.4% to 3,597.04.
Data released by Japan’s finance ministry showed the world’s third-largest economy could be heading for a recovery, with December’s exports increasing for the first time in two years, by 2% from the same month a year earlier. . Imports fell 11.6%, marking the 20th consecutive month of declines.
The Japanese economy, like many others in the region, has come under fire from the coronavirus pandemic, which has crushed tourism and hampered economic activity and trade. Bank of Japan holds policy board meeting, but analysts expect little change. Tokyo and other urban areas in Japan are in a state of emergency as coronavirus cases have increased in recent times.
On Wall Street, the S&P 500 rose 1.4%, breaking its previous all-time high set earlier this month. The Dow Jones Industrial Average, the Nasdaq Composite and the Russell 2000 Index of Small Businesses also hit record highs, fueled by gains in technology, communications, healthcare and most other sectors.
Biden took a wave of executive actions in his early hours as president. He also launched a plan to inject another $ 1.9 trillion into the struggling economy, hoping to act quickly as his Democratic Party now controls the White House and both houses of Congress.
The hope on Wall Street is that such a stimulus will help support the economy until later this year, when more widespread COVID-19 vaccinations come closer to everyday life.
“Most of Wall Street assumes that the second half (of 2021) will be when we see pent-up demand start to emerge in the economy, which will push economic indicators higher and likely lead to higher earnings forecasts. , ”Said Sam Stovall, chief investment strategist at CFRA.
The S&P 500 rose 52.94 points to 3851.85. The Dow Jones gained 257.86 points, or 0.8%, to 31,188.38. The Nasdaq climbed 260.07 points, or 2%, to 13,457.25. The Russell 2000 had 9.48 points, or 0.4%, at 2,160.62.
A better-than-expected start to the earnings reporting season also helped boost the US market. Analysts arrived with low expectations, predicting that the large companies in the S&P 500 will report a fourth straight decline in earnings per share due to damage from the pandemic. But the vast majority of early reports managed to beat expectations.
Netflix jumped 16.9% for the biggest gain on the S&P 500 after reporting late last year with more than 200 million subscribers. It made more revenue at the end of 2020 than analysts expected, although its profits were lower than expected.
Gains for stocks have accelerated since Biden was elected over enthusiasm for COVID-19 vaccines and potential economic moves. The rise in shares between election day and Biden’s inauguration was larger than Trump’s between his election and his inauguration.
“The market has grown 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 the market. administration of a Democratic president, up from an average gain of 0.5% when a Republican was in the White House.
Analysts have expressed concern about the high price of stocks as the last cycle of corporate earnings approaches, but they look more reasonable amid historically low interest rates, said Solita Marcelli, chief investment officer, Americas , at UBS Global Wealth Management. Low rates, along with further stimulus and continued vaccine deployment, are likely to help support markets and the recovery.
“We believe that global growth will continue to accelerate,” she said.
In energy trading, benchmark US crude gained 26 cents to $ 53.24 a barrel. Brent, the international standard, fell 19 cents to $ 55.89 a barrel.
In currency trading, the US dollar slipped to 103.52 Japanese yen from 103.76 yen. The euro cost $ 1.2128, compared to $ 1.2134.
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AP Business editors Stan Choe, Damian J. Troise and Alex Veiga contributed.
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