SHANGHAI (Reuters) – Asian equities rose on Friday after US President Joe Biden signed a $ 1.9 trillion stimulus bill and a European central bank meeting led to a decline in bond yields and eased global concerns about rising inflation.
But European stocks, which jumped to Thursday’s ECB meeting, appeared to be withdrawing from a peak a year later. Euro-Stoxx 50 pan-regional futures fell 0.03%, while German futures DAX and FTSE fell about 0.2% in early transactions.
Biden signed the stimulus legislation before a televised address in which he promised aggressive action to speed up vaccinations and bring the country closer to normal by July 4.
The signing of the US rescue plan gave a new impetus to market sentiment after the European Central Bank said it was ready to speed up the printing of money to maintain borrowing costs, more generously using its $ 1.85 trillion Emergency Purchase Program (PEPP). in the coming months to stop any unjustified increase in debt financing costs.
This and a better-than-expected U.S. government bond auction could support a rally in technology stocks and a rotation between stocks and stocks in the coming weeks, said Cliff Zhao, chief strategist at China Construction Bank International in Hong Kong. .
“But in the second quarter the market is still (will be) very volatile and especially when we look at the US dollar is much stronger than expectations at the end of last year. So, I think the strong US dollar could affect some liquidity conditions in emerging markets, “he said.
The largest MSCI index of Asia-Pacific equities outside Japan gained 0.53%, supported by technological gains.
KOSPI in Seoul added 1.39%, shares in Taiwan rose 0.27% and ASX 200 in Australia gained 0.79%.
Japan’s Nikkei rose 1.58% and China’s CSI300 rose 0.05% as high-tech firms and consumer firms fell.
US Treasury yields were higher on Friday, with the 10-year yield at 1.5512% after falling to 1.475% overnight, the first incursion below 1.5% in a week.
The 10-year German yield was last at -0.331% after reaching a three-week low of -0.367%.
“There may be some disappointment (ECB) has not expanded its bond-buying program, but this is largely offset by commitments to accelerate purchases,” said Michael McCarthy, chief market strategist at CMC Markets.
On Wall Street, easing inflation concerns helped support the action. The Dow Jones industrial average rose 0.58% and the S&P 500 gained 1.04%, both to record highs. Nasdaq Composite added 2.52%.
Sentiment was also boosted by weekly unemployment data, which indicated a recovery in the US labor market as the launch of vaccines contributed to the economic reopening.
Analysts largely expect inflation to rise as the launch of vaccines reopens them, but concerns remain that Biden’s stimulus package could overheat the economy.
The dollar gained 0.22% against the yen to 108.73, and the euro fell 0.18% that day to $ 1.1963. The dollar index, which tracks the dollar against a basket of six major rivals, rose 0.14% to 91.568.
Oil prices retreated from sharp gains as the dollar confirmed, with US crude falling 0.41% to $ 65.75 a barrel. Crude oil lost 0.27% to $ 69.44 a barrel.
Spot gold prices fell 0.22% to $ 1,717.70 an ounce.
Reporting by Andrew Galbraith in Shanghai and Matt Scuffham in New York; Montage by Stephen Coates