Asian stocks rose to new record highs on Thursday, tracking U.S. markets as investors hoped for more economic stimulus from newly inaugurated U.S. President Joe Biden to offset damage wreaked by the COVID-19 pandemic.
Republicans in the U.S. Congress have indicated they are willing to work with the new president on his administration’s top priority, a $1.9 trillion U.S. fiscal stimulus plan, but some are opposed to the plan’s price tag. Democrats took control of the U.S. Senate on Wednesday, but will still need Republican support to pass the program.
But after record high closes on Wall Street overnight, markets in Asia reflected relief over an orderly transition of power and strong expectations that U.S. stimulus will provide continued support for global assets.
Kay Van-Petersen, global macro strategist at Saxo Capital Markets, said that Democratic control of the Senate “increases not just the probability of more fiscal (stimulus), but the magnitude.”
“That means that this market should be way, way, way higher as a whole and we’re going to get there. We’re entering this regime of even more accelerated asset class inflation,” he said.
MSCI’s broadest index of Asia-Pacific shares outside Japan touched record highs and was last up 0.85%, with markets across the region posting gains.
Chinese blue-chips added 1.2%, Australian shares climbed 0.69% and Hong Kong’s Hang Seng breached the 30,000 level, rising 0.31%.
Japan’s Nikkei 225 was up 0.72%, less than 1% off three-decade highs reached last week.
Mainland Chinese stocks were up by the early morning. The Shanghai Composite was up by 1.31% to 3,630.31. Hong Kong’s Hang Seng Index was up about 0.10% to 29,989.00.
Japan’s benchmark Nikkei average. Nikkei 225 is trading down 0.69 per cent at 28,715.00 on Thursday, while the broader TOPIX 100 rose 0.56 per cent to 1,213.88. South Korea’s Kospi was up by 0.96% to 3144.75.