Global stocks follow Wall St up, silver eases off high

BEIJING (AP) – Global stocks followed Wall Street higher yesterday after United States (US) President Joe Biden invited Republicans to a meeting to discuss economic aid, while silver eased off an eight-year high.

London and Frankfurt opened higher. Shanghai, Tokyo and Hong Kong also advanced.

US futures rose a day after Wall Street’s benchmark S&P 500 index gained 1.6 per cent amid frenzied trading of video game retailer GameStop and other stocks targetted by novice day traders.

In Washington, Biden invited 10 moderate Republicans to the White House to discuss his proposed USD1.9 trillion economic aid plan. Republicans earlier countered with an offer of USD600 billion, or less than one-third of Biden’s proposed amount.

“The sound of more stimulus, which tends to raise all boats, was music to the market’s ears,” said Stephen Innes of Axi in a report.

In early trading, the FTSE 100 in London rose 0.2 per cent to 6,481.54 and Frankfurt’s DAX opened up 0.8 per cent at 13,729.33. The CAC 40 in Paris gained 1.2 per cent to 5,529.47.

On Wall Street, futures for the S&P 500 index and Dow Jones Industrial Average were up 0.7 per cent.

On Monday, the Dow rose 0.8 per cent. The Nasdaq composite climbed 2.5 per cent.

People walk past the New York Stock Exchange during a snowstorm in New York. PHOTO: AP

US markets have been roiled by trading in GameStop and some other stocks that had been expected to decline but surged after novice traders bought. Other investors said hedge funds that bet against those stocks were losing money and selling other shares.

GameStop slumped 30.8 per cent to USD225 a share. It ended last year at about USD18.

Tech stocks led the way higher. Communication stocks and a variety of companies that rely on direct consumer spending such as Starbucks and AutoZone helped lift the market.

The price of silver retreated from an eight-year high. Silver for March delivery sank USD1.43, or 4.9 per cent, to USD27.96 per ounce.

Last week, messages on social media encouraged small investors to buy silver. It shot up on Monday, but many online investors said it wasn’t them bidding up the price.

Smaller traders are learning “the silver market is much bigger than some of the small cap stocks they have been trading”, said Edward Moya of Oanda in a report. “Silver coin purchases and call option bets are not enough of a driver to send silver prices skyrocketting to record high levels.”

In Asia, the Shanghai Composite Index rose 0.8 per cent to 3,533.68 and the Nikkei 225 in Tokyo advanced one per cent to 28,352.17. The Hang Seng in Hong Kong added 2.1 per cent to 29,248.70.

The Kospi in Seoul was up 1.3 per cent to 3,096.81 and India’s Sensex added 2.4 per cent
to 49,753.85.

Sydney’s S&P-ASX 200 gained 1.5 per cent to 6,762.60 after Australia’s central bank left its key interest rate unchanged at 0.1 per cent and extended a bond purchase programme through September. The bank said the job market exceeded expectations.

New Zealand and Jakarta retreated while Singapore and Bangkok rose.

Investors bid up stocks heading into 2021 in expectation the rollout of coronavirus vaccines would allow global business and travel to return to normal. That optimism has been dented by infection spikes and disruptions in vaccine deliveries.

In energy markets, benchmark US crude rose 84 cents to USD54.39 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained USD1.35 on Monday to USD53.55 a barrel. Brent crude, used to price international oils, added 80 cents to USD57.15 per barrel in London. It advanced USD1.31 the previous session to USD56.35.

The dollar declined to JPY104.87 from Monday’s JPY104.94. The euro rose to USD1.2084 from USD1.2066.