Global stocks rise as markets watch for Biden stimulus plan

BEIJING (AP) — Global stock markets and United States (US) futures rose yesterday as investors waited for details of US President-elect Joe Biden’s promised economic stimulus plan.

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

Investors were encouraged by US election results that gave Biden’s Democratic Party control the Senate, reducing potential opposition to his stimulus plans. Biden promised to announce details this week of the plan he will propose after he takes office January 20.

“Investors found optimism in the prospect of further fiscal stimulus,” said Cesar Perez Ruiz of Pictet Wealth Management in a report. With the Senate in Democratic hands, “President-elect Biden has a better chance of pushing through his agenda and delivering sorely-needed stimulus and support.”

No major potentially market-moving events were on the calendar yesterday in Asia.

In early trading, the FTSE 100 in London rose 0.1 per cent to 6,808.60 and the DAX in Frankfurt added 0.3 per cent to 13,981.31. The CAC 40 in France added 0.3 per cent to 5,67.56.

On Wall Street, futures for the benchmark S&P 500 index and the Dow Jones Industrial Averages were up 0.2 per cent.

A woman walks past a bank’s electronic board showing the Hong Kong share index at Hong Kong Stock Exchange. PHOTO: AP

On Monday, the S&P 500 declined 0.7 per cent while the Dow lost 0.3 per cent. The Nasdaq composite slid 1.3 per cent.

In Asia, the Shanghai Composite Index rose 2.2 per cent to 3,608.34 and the Nikkei 225 in Tokyo added 0.1 per cent to 28,164.34. The Hang Seng in Hong Kong gained 1.3 per cent to 28,271.76.

The Kospi in Seoul lost 0.7 per cent to 3,125.95 and the S&P-ASX 200 in Sydney declined 0.3 per cent to 6,679.10.

India’s Sensex advanced 0.4 per cent to 49,453.06. New Zealand and Singapore declined while Bangkok and Jakarta rose. US markets shrugged off the attack on the Capitol in Washington by Trump supporters who were trying to block final confirmation of Biden’s victory. “I believe stocks were looking ahead to better days, expecting a robust economic recovery once there is broad distribution of vaccines,” Kristina Hooper of Invesco said in a report.

The market’s record-setting run means stocks and other investments are even more expensive. That has led to suggestions they are unsustainably high.

Stocks in the S&P 500 are trading at roughly 29 times earnings, well above their average of 18 times over the past decade.

The gains come despite negative US economic news. Employers cut more jobs last month than they added for the first time since the start of the pandemic last spring.

The US and other countries also face more contagious types of the coronavirus. That is prompting governments to reimpose restrictions that disrupt travel and commerce.

In Washington, Democrats are pushing for the removal of Trump, who has less than two weeks left in his term, after he helped to incite loyalists who stormed the Capitol.

Shares of Twitter slid 6.4 per cent for one of the largest losses in the S&P 500 after it banned Trump from his account and his 89 million followers. That angered Trump supporters, who may abandon the service or ask for more regulatory scrutiny of the company. Facebook fell four per cent after it suspended Trump’s accounts.

In energy markets, benchmark US crude gained 40 cents to USD52.65 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose one cent on Monday to USD52.25. Brent crude, used to price international oils, advanced 37 cents to USD56.03 per barrel in London. It fell 33 cents the previous session to USD55.66 a barrel.

The dollar rose to JPY104.21 from Monday’s JPY104.16. The euro fell to USD1.2156
from USD1.2163.