TOKYO (AP) – Asian stocks rose on Thursday due to optimism about the new US administration that previously started a rally on Wall Street.
Hopes are high that the administration of President Joe Biden would mean more support for the troubled U.S. economy, leading to a crucial recovery for the export-driven Asian region.
The Japanese benchmark Nikkei 225 rose 0.7% when trading in the morning to 28,733.11. Australia’s S & P / ASX 200 gained 0.6% to 6,811.20, while South Korean Kospi rose 0.4% to 3,127.81. Hong Kong’s Hang Seng changed little, rising 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 world’s third-largest economy could be heading for a recovery, as December exports rose for the first time in two years, 2% from the same month last year. previous year. Imports fell 11.6%, marking the twentieth consecutive month of falls.
The Japanese economy, like many others throughout 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 political board meeting, but analysts expect few changes. Tokyo and other urban areas of 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 all-time high earlier this month. The Dow Jones Industrial Average, the Nasdaq composite and the Russell 2000 index of smaller firms also set record highs, driven by gains in technology, communications, healthcare and most other sectors.
Biden made a series of executive actions in his early hours as president. He also unveiled a plan to allocate $ 1.9 trillion more to the troubled economy, hoping to act quickly as his Democratic party now controls the White House and both houses of Congress.
On Wall Street, the hope is that this stimulus will help bring the economy to an end this year, when the most widespread vaccines against COVID-19 bring daily life closer to normal.
“Most Wall Street assumes that the second half (of 2021) is when we will see accumulated demand begin to appear in the economy, and this will increase economic indicators and likely lead to increased profit projections.” , 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, 0.8%, to 31,188.38. The Nasdaq rose 260.07 points, up 2%, to 13,457.25. The Russell 2000 gained 9.48 points, 0.4%, to 2,160.62.
A better-than-expected earnings reporting start to the season also helped lift the U.S. market. Analysts came in with low expectations, predicting that large S&P 500 companies will report a fourth consecutive drop in earnings per share due to the damage from the pandemic. But the vast majority of early reports have managed to exceed forecasts.
Netflix jumped 16.9% to make the most of the S&P 500 after saying it ended last year with more than 200 million subscribers. It earned more revenue in late 2020 than analysts expected, although its profits were lower than forecast.
Earnings for stocks have accelerated since the Biden election due to enthusiasm for COVID-19 vaccines and possible economic moves. The protection of actions between election day and Biden’s inauguration was greater than Trump’s protest between his election and inauguration.
“The market has risen more than 13% since election day,” Stovall said, noting that since World War II, the S&P 500 has risen an average of 3.5% in the first 100 days. of the administration of a Democratic president, versus an average gain of 0.5% when a Republican was in the White House.
Analysts have expressed concern about the values of stocks facing the latest round of corporate earnings, but they seem more reasonable in the context of historically low interest rates, said Solita Marcelli, investment director of ‘America at UBS Global Wealth Management Low rates, coupled with a new stimulus and continued vaccine deployment, are likely to help strengthen markets and recovery.
“We believe global growth will continue to recover,” he said.
In the energy trade, the U.S. crude oil 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, below $ 1.2134.
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Business writers Stan Choe, Damian J. Troise and Alex Veiga wrote.