(ATF) Hong Kong: Asian markets advanced amid growing hopes that US President Joe Biden’s bid to fast-track a $1.9 trillion stimulus package will succeed with progress in vaccine distribution also lifting sentiment.
Oil spiked to near year highs as economic recovery hopes and expectations of supply curbs by producer group OPEC and its allies took hold.
Japan’s Nikkei 225 index vaulted 1.54%, Australia’s S&P ASX 200 added 1.11%, Hong Kong’s Hang Seng index advanced 0.60%, and China’s CSI300 edged up 0.17%. Regionally, the MSCI Asia Pacific index rose 1.25%.
Early on Friday, the US Senate passed a budget resolution that will allow the Democrats to pass President Joe Biden’s $1.9 trillion pandemic relief package without Republican support.
Vice President Kamala Harris passed the tie-breaking vote to make it 51-50 in the showdown (early Friday in the US but late in the day in Asia). Republicans oppose Biden’s bill because they say it is too expensive. The House had already passed the bill earlier in the week but it will have to be reconciled with the Senate version
The economic optimism could be further fueled later after the US non-farm payroll data is released. It is expected that nonfarm payrolls increased by 50,000 jobs last month after declining by 140,000 in December.
Economic rebound hopes were already running high after data showed new orders for US-made goods rose more than expected in December and with the Congress moving ahead on Biden’s Covid relief plan.
Stimulus fever spills into Asia
“The stimulus fever that swept Wall Street overnight has spilt over into Asian markets today,” said Jeffrey Halley, a senior market analyst on Asia Pacific for OANDA.
“Although the tone is generally positive today, the North/South East Asia divide is starkly revealed. ASEAN markets are struggling to buy into the global recovery story with their less tech and manufacturing heavy indices, being heavily weighted to banks, property and commodities, which have been soft this week ex-energy.”
US Treasuries sold off in the risk on environment with the 10-year yield rising 2 basis points to 1.17%. The dollar came off its previous highs to trade 0.2% lower at 91.4 which boosted gold prices. Gold was 0.4% higher at $1,801 per ounce.
Despite the dollar’s recent gains, dollar scepticism abounded.
“The USD’s safe-haven status is largely redundant in the current environment, given the abundance of monetary stimulus and the availability of USD financing on easy terms,” Standard Chartered global FX head Steve Englander said.
“Other countries are likely to make up their vaccine distribution shortfalls eventually, and the EU may be faster than others given its ability to pressure producers.”
Overnight, Johnson & Johnson said on Thursday it has asked US health regulators to authorize its single-dose Covid-19 vaccine for emergency use, and it will apply to European authorities in coming weeks.
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Asia Stocks
· Japan’s Nikkei 225 index vaulted 1.54%
· Australia’s S&P ASX 200 added 1.11%
· Hong Kong’s Hang Seng index advanced 0.60%
· China’s CSI300 edged up 0.17%
· The MSCI Asia Pacific index rose 1.25%.
Stock of the day
Kuaishou Technology shares tripled on debut after the Chinese online video service operator made its trading debut. It rose to a high of HK$345 per share after it sold shares at HK$115 apiece in a $5.4 billion initial public offering (IPO).
