TOKYO (AP) – Asian stocks rose on Thursday amid optimism about the new US government that previously rallied on Wall Street.
It is hoped that President Joe Biden’s administration will bring more support to the struggling US economy, sparking a recovery critical to the export-driven Asian region.
The Japanese benchmark Nikkei 225 rose 0.7% in morning trading to 28,733.11. The Australian S & P / ASX 200 gained 0.6% to 6,811.20, while the South Korean Kospi was up 0.4% to 3,127.81. Hong Kong’s Hang Seng had changed little, rising less than 0.1% to 29,974.00, while Shanghai Composite added 0.4% to 3,597.04.
Data released by Japan’s Ministry of Finance shows the world’s third-largest economy could crawl into a recovery as exports for December surged for the first time in two years, up 2% from the same month the previous year. Imports fell 11.6%, marking the 20th consecutive month of declines.
Japan’s economy, like many others in the region, has been hit by the coronavirus pandemic, which has crushed tourism and dampened economic activity and trade. The Bank of Japan is holding a policy council meeting, but analysts expect little change. Tokyo and other urban areas of Japan are in a state of emergency as the number of coronavirus cases has increased in recent times.
On Wall Street, the S&P 500 rose 1.4%, surpassing the previous all-time record earlier this month. The Dow Jones Industrial Average, Nasdaq Composite Index and Russell 2000 Index of smaller companies also hit record highs, powered by gains in technology, communications, healthcare and most other sectors.
Biden took a flurry of executive action during his first hours as president. He also pitched a plan to pump $ 1.9 trillion more into the struggling 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 bolster the economy until later this year, when more widespread COVID-19 vaccinations bring everyday life closer to normal.
“ Most of Wall Street assumes that in the second half (of 2021) we will see pent-up demand in the economy, and that will push economic indicators upward and probably lead to an increase in earnings forecasts, ” Sam Stovall, chief investment strategist at CFRA said.
The S&P 500 rose 52.94 points to 3,851.85. The Dow earned 257.86 points, or 0.8%, to 31,188.38. The Nasdaq climbed 260.07 points, or 2%, to 13,457.25. The Russell 2000 took 9.48 points, or 0.4%, to 2,160.62.
A better than expected start to the earnings reporting season also contributed to the upturn in the US market. Analysts came in with low expectations, predicting that the large companies in the S&P 500 will report a fourth consecutive decline in earnings per share due to the damage from the pandemic. But the vast majority of early reports have managed to beat predictions.
Netflix jumped 16.9% for the S&P 500’s biggest gain after it said it ended last year with more than 200 million subscribers. It made more revenue in late 2020 than analysts expected, although revenue fell short of forecasts.
Stock earnings have accelerated since Biden’s election due to enthusiasm about COVID-19 vaccines and possible economic moves. The bump for stocks between election day and Biden’s inauguration was bigger than Trump’s between his election and inauguration.
“The market is up more than 13% since election day,” said Stovall, noting that the S&P 500 has risen an average of 3.5% in the first 100 days of a Democratic president’s rule since World War II, compared to an average. gain of 0.5% when a Republican was in the White House.
Analysts have expressed concern about pricey stock prices entering the latest round of corporate earnings, but they look more reasonable amid historically low interest rates, said Solita Marcelli, Chief Investment Officer Americas at UBS Global Wealth Management. The low rates, along with new stimulus measures and the continued introduction of vaccines, are likely to help strengthen markets and the recovery.
“We think global growth will continue to pick up,” she said.
In energy trading, the US benchmark crude oil rose 26 cents to $ 53.24 a barrel. Brent crude oil, the international standard, fell 19 cents to $ 55.89 a barrel.
In currency trading, the US dollar fell from 103.76 yen to 103.52 Japanese 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.