SHANGHAI (Reuters) – Asian stocks rose Friday after US President Joe Biden signed a $ 1.9 trillion stimulus bill and dispelled a slowdown in bond yields and global concerns about rising inflation after a moderate meeting of the European Central Bank.
But European equities, which had risen at Thursday’s ECB meeting, appeared to pull back a day later after a full year spike. Pan Region Euro Stoxx 50 futures were down 0.03% and both German DAX and FTSE futures were down about 0.2% on early deals.
Biden signed the stimulus bill ahead of a televised address pledging aggressive action to speed up vaccinations and bring the country closer to normalcy by July 4.
The signing of the US bailout further boosted market sentiment after the European Central Bank said it was willing to speed up money printing to control borrowing costs through its 1.85 Pandemic Emergency Purchase Program (PEPP) trillion euros more generously. in the coming months to stop any unjustified rise in debt financing costs.
That and a better-than-expected auction of US Treasuries could support a rally in tech stocks and a rotation between growth and value 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 (will) still be very volatile, and especially when we look at the US dollar, it is much stronger than expected around the end of last year. So I think the strong US dollar may weigh on some of the liquidity conditions in the emerging markets, ”he said.
MSCI’s widest index of Asia-Pacific stocks outside Japan gained 0.53%, supported by technology gains.
Seoul’s KOSPI added 1.39%, Taiwanese stocks were up 0.27% and Australian ASX 200 gained 0.79%.
Japan’s Nikkei was up 1.58%, and the Chinese blue-chip CSI300 index was up 0.05% as the slump of top-rated technology and consumer companies completed earnings.
US Treasury yields were higher on Friday, with a 10-year yield of 1.5512% after dropping overnight to 1.475%, its first foray below 1.5% in a week.
Germany’s 10-year yield last stood at -0.331% after hitting a three-week low of -0.367%.
“There might be some disappointment (the ECB) has not expanded its bond buying program, but that’s largely offset by commitments to accelerate purchases,” said Michael McCarthy, chief market strategist at CMC Markets.
On Wall Street, diminishing inflation concerns helped support stocks. The Dow Jones Industrial Average rose 0.58% and the S&P 500 rose 1.04%, both to record highs. The Nasdaq Composite added 2.52%.
Sentiment was also boosted by weekly unemployment benefit data, which pointed to a recovering US labor market as vaccine rollouts helped lead to economic reopenings.
Analysts largely expect inflation to pick up as vaccine rollouts lead to a reopening, 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 fell from sharp gains as the dollar strengthened, with US crude falling 0.41% to $ 65.75 a barrel. Brent crude 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; Editing by Stephen Coates