TOKYO (AP) — Global shares rose yesterday on hopes for additional economic stimulus after United States (US) President-elect Joe Biden takes office.
France’s CAC 40 added 0.8 per cent in early trading to 5,714.76, while Germany’s DAX was up nearly 0.9 per cent at 14,088.57. Britain’s FTSE 100 gained 0.3 per cent to 6,874.86. US shares were set for gains with Dow futures up 0.4 per cent at 31,051. S&P 500 futures added 0.4 per cent to 3,808.88.
A new state of emergency in the Tokyo region to combat surging coronavirus cases did little to dampen market optimism. The benchmark Nikkei 225 surged 2.4 per cent to close at 28,139.03, its highest finish in more than 30 years.
The emergency declaration, announced by Prime Minister Yoshihide Suga for Tokyo and nearby areas, asked people to stay home and refrain from going out at night to dine and drink. Authorities have little power to enforce anything like the kinds of lockdowns seen in some other countries.
South Korea’s Kospi gained nearly 4.0 per cent to 3,152.18, while Australia’s S&P/ASX 200 edged up 0.7 per cent to 6,757.90. Hong Kong’s Hang Seng jumped 1.2 per cent to 27,878.22, while the Shanghai Composite slipped 0.2 per cent to 3,570.11.
Regional share prices were boosted by major US stock indexes surging to all-time highs.
“Asia markets tracked the Wall Street optimism for a second morning, climbing amid the sustained hopes of further fiscal injections in the US to keep the recovery on track,” said Market Strategist Jingyi Pan at IG in Singapore.
US President Donald Trump has issued a statement saying there will be an “orderly transition on January 20”, although he continues to claim falsely that he won.
Democratic victories in the two runoffs held on Tuesday for Georgia’s US Senate seats tipped the Senate to 50-50 split, with potential ties being broken by Vice President-elect Kamala Harris.
With Democrats fully in control of Washington, Wall Street is anticipating the Biden administration and Congress will try to deliver USD2,000 cheques to most Americans, increase spending on infrastructure and take other measures to nurse the economy amid the worsening pandemic.
Investors are largely looking past the current political ugliness — and the pandemic’s acceleration around the world — and are focussing instead on prospects for an improving economy.
Hopes are also growing about the rollout of COVID-19 vaccines to help daily life around the world get closer to normal. That has investors anticipating a explosive return to growth for corporate profits later this year.
In energy trading, benchmark US crude added 14 cents to USD50.97 a barrel in electronic trading on the New York Mercantile Exchange. It gained 20 cents on Thursday to USD50.83 per barrel. Brent crude, the international standard, rose 21 cents to USD54.59 a barrel.
In currency trading, the US dollar rose to JPY104.00 from JPY103.80 late Thursday. The euro cost USD1.2227, down from USD1.2270.