TOKYO (AP) – Asian stocks rose on Thursday with optimism over the new US administration, which earlier launched a rally on Wall Street.
Hopes are high that the administration of President Joe Biden will mean more support for the troubled US economy, triggering a crucial recovery for the export-oriented Asian region.
Japan’s Nikkei 225 benchmark rose 0.7% in morning trading to 28,733.11. The S & P / ASX 200 in Australia gained 0.6% to 6,811.20, while Kospi in South Korea rose 0.4% to 3,127.81. Hong Kong’s Hang Seng was slightly lower, rising by less than 0.1% to 29,974.00, while Shanghai Composite added 0.4% to 3,597.04.
Data released by the Japanese Ministry of Finance showed that the third largest economy in the world could be heading for a recovery, as exports for December rose for the first time in two years, by 2% from the same month of the previous year. Imports fell by 11.6%, marking the 20th consecutive month of decline.
Japan’s economy, like many others in the region, has been hit by the coronavirus pandemic, which has crushed tourism and reduced economic activity and trade. The Bank of Japan is holding a political council meeting, but analysts expect little change. Tokyo and other urban areas in Japan are in a state of emergency as coronavirus cases have increased recently.
On Wall Street, the S&P 500 rose 1.4%, surpassing its previous record set earlier this month. The Dow Jones Industrial Average, Nasdaq composites and the Russell 2000 index of smaller companies also recorded record highs, fueled by gains in technology, communications, healthcare and most other sectors.
Biden took a lot of executive action in his early hours as president. He also launched a $ 1.9 trillion pumping plan into the troubled 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 transport the economy until later this year, when the more widespread COVID-19 vaccinations bring daily life closer to normal.
“Most of Wall Street assumes that the second half (from 2021) is when we will see the reloaded demand start to appear in the economy and will push economic indicators higher and likely cause an increase in earnings forecasts, “, Said Sam Stovall, chief investment strategist at CFRA.
The S&P 500 rose 52.94 points to 3,851.85. The Dow gained 257.86 points, or 0.8%, to 31,188.38. The Nasdaq rose 260.07 points, or 2%, to 13,457.25. Russell 2000 gained 9.48 points, or 0.4%, to 2,160.62.
A better-than-expected revenue reporting season also helped lift the US market. Analysts came in with low expectations, predicting that large companies in the S&P 500 will report a fourth consecutive decline in earnings per share due to pandemic damage. But the vast majority of the first reports managed to exceed the forecasts.
Netflix rose 16.9% for the S&P 500’s biggest gain after declaring it ended last year with more than 200 million subscribers. It had higher revenues at the end of 2020 than analysts expected, although its revenues fell compared to forecasts.
Earnings for stocks have accelerated since Biden’s election enthusiasm for COVID-19 vaccines and potential economic moves. The rise in stocks between election day and Biden’s inauguration was greater than Trump’s rise between election and inauguration.
“The market has grown by more than 13% since election day,” Stovall said, noting that since World War II, the S&P 500 has grown by an average of 3.5% in the first 100 days of the Democratic president’s administration. , compared to an average gain of 0.5% when a Republican was in the White House.
Analysts have expressed concern about the high value of stocks heading into the latest round of corporate earnings, but they seem more reasonable amid historically low interest rates, said Solita Marcelli, chief investment officer, America , UBS Global Wealth Management. Low rates, coupled with a new stimulus and the continued launch of vaccines, are likely to help strengthen markets and recover.
“We believe that global growth will continue to grow,” she said.
In the energy trade, the US crude oil crude gained 26 cents to $ 53.24 a barrel. Brent crude, the international standard, fell 19 cents to $ 55.89 a barrel.
In foreign exchange trading, the US dollar fell to 103.52 Japanese yen from 103.76 yen. The euro cost $ 1,2128, down from $ 1,2134.
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AP business writers Stan Choe, Damian J. Troise and Alex Veiga contributed.