Asian shares edge up near record highs on Friday after U.S. President-elect Joe Biden proposed a $1.9 trillion stimulus plan to jump-start the world’s largest economy and accelerate its response to COVID-19.
In prime-time remarks, Biden outlined a proposal that includes $415 billion aimed at the COVID-19 response, some $1 trillion in direct relief to households, and roughly $440 billion for small businesses and communities hard hit by the pandemic.
Global stocks had initially firmed on Thursday on a report that the stimulus package could be as big as $2 trillion, much more than markets were expecting.
Biden’s comments came after Federal Reserve Chair Jerome Powell struck a dovish tone in comments at a virtual symposium with Princeton University.
Powell said the U.S. central bank is not raising interest rates anytime soon and rejected suggestions the Fed might start reducing its bond purchases in the near term.
“It’s pretty clear that there’s going to be significant stimulus. The vaccines are being rolled out, so you’re going to receive significant stimulus in a kind of recovery scenario. That is very bullish for risk assets, particularly as it’s unlikely that interest rates will be rising anytime soon,” said Michael Frazis, portfolio manager at Frazis Capital Partners in Sydney.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.1% around midday in Asia, just off a record high. Hong Kong’s Hang Seng added 0.32%, while Australia’s ASX 200 rose 0.17%.
Japan’s Nikkei 225 was down 0.21% after touching three-decade highs in the previous session, Chinese blue-chips lost nearly 1% amid worries over rising COVID-19 cases in the country.
Mainland Chinese stocks were down by the early morning. The Shanghai Composite was down by 0.60% to 3,545.88. Hong Kong’s Hang Seng Index was down about 0.33% to 28,404.25.
Japan’s benchmark Nikkei average. Nikkei 225 is trading down 0.61 per cent at 28517.03 on Friday, while the broader TOPIX 100 fell 0.64 per cent to 1,212.48. South Korea’s Kospi was down by 1.74% to 3094.32.