Asian shares mixed after stimulus lifts Dow, S&P to records

BANGKOK (AP) — Stocks were mixed in Asia yesterday after broad gains lifted several major indexes to all-time highs on Wall Street.

Tokyo’s benchmark rose one per cent while Chinese indexes slipped as investors cashed in on recent surges in share prices. Oil prices fell slightly and the yield on the United States (US) 10-year Treasury was steady at 1.54 per cent.

US markets surged after US President Joe Biden signed into law a sweeping pandemic relief package that would provide USD1,400 cheques for most Americans and direct billions of dollars to schools, state and local governments, and businesses affected by pandemic-related shutdowns, which began a year ago.

That and progress in vaccinations against Covid-19 have helped settle some of the uncertainty that has roiled markets in recent weeks.

The Nikkei 225 added 277 points to 29,488.74 while South Korea’s Kospi climbed 0.9 per cent to 3,041.31.

In Australia, the S&P/ASX 200 added 0.8 per cent to 6,764.90. Hong Kong’s Hang Seng lost 0.5 per cent to 29,238.89 and the Shanghai Composite index declined 0.3 per cent to 3,428.15.

A currency trader walks by the screen showing the foreign exchange rate between US dollar and South Korean won at the foreign exchange dealing room in Seoul. PHOTO: AP

Shares rose in Jakarta but fell in Singapore and Malaysia. Taiwan was unchanged.

On Thursday, the S&P 500, the Dow Jones Industrial Average and a measure of small-company stocks all closed at record levels as a recent stretch of volatile trading in the bond market continued to ease, keeping investors in a buying mood.

The S&P 500 added one per cent to 3,939.34. The Dow added 0.6 per cent to 32,485.59, its second all-time high in a row.

The Nasdaq composite gained 2.5 per cent to 13,398.67. The tech-heavy index, which earlier in the week skidded more than 10 per cent below its February peak, has regained some ground, but remains 4.9 per cent below that all-time high.

Traders also bid up shares in smaller stocks, pushing the Russell 2000 index up 2.3 per cent to 2,338.54.

Technology stocks, which have been hurt this year by rising bond yields, led the market higher, aided by solid gains in communications services companies and those that rely on consumer spending. Banks, utilities and household goods companies fell.

The stimulus coupled with ultra-low interest rates are expected to help charge growth as industries bounce back from pandemic downturns, analysts said.

“We’re entering this environment where growth is going to be higher than expected,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. “With higher growth you get higher interest rates.”

The biggest IPO in years rolled out on Thursday on the New York Stock Exchange where Coupang, the South Korean equivalent of Amazon in the US, or Alibaba in China, began trading under the ticker ‘CPNG’. The stock soared 40.7 per cent. It’s actually the largest initial public offering from an Asian company since Alibaba went public about seven years ago and the biggest in the US since Uber’s more than USD8 billion IPO in 2019.

General Electric (GE) fell 7.4 per cent for the biggest slide in the S&P 500 for the second straight day. The industrial titan announced it would wind down its GE Capital business and merge its jet leasing business with Ireland’s AerCap. GE is in the midst of a multi-year turnaround plan, but investors have been concerned GE has been selling off too many of its more profitable assets.

The price of US crude oil rose 2.5 per cent and lifted energy company stocks. Occidental Petroleum jumped 5.5 per cent and Hess rose 3.2 per cent.

Yesterday, benchmark US crude slipped 19 cents to USD65.83 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard for pricing, lost 12 cents to USD69.52 per barrel.

The US dollar cost JPY108.71, up from JPY108.53 late Thursday. The euro fell to USD1.1962 from USD1.1983.