Shares across Asia-Pacific rose following Joe Biden’s inauguration as the 46th US president, as the prospect of nearly $2tn in stimulus spending helped push stocks on Wall Street to an all-time high.
Japan’s Topix index rose 0.8 per cent in early trading on Thursday, while Australia’s S&P/ASX 200 gained 0.7 per cent and South Korea’s Kospi climbed 0.4 per cent. Mainland China’s CSI 300 of Shanghai- and Shenzhen-listed stocks added 0.8 per cent and Hong Kong’s Hang Seng slipped 0.2 per cent.
Overnight, Wall Street’s S&P 500 index closed up 1.4 per cent while the technology-focused Nasdaq rose 2 per cent, with both benchmarks hitting record highs. Investors hope the Biden administration’s spending plans could boost a global economy pummelled by the coronavirus pandemic.
“The first day of President Biden's presidency has received a broad thumbs-up from markets,” said Robert Carnell, regional head of Asia-Pacific research at ING.
S&P 500 futures rose 0.2 per cent during Asian trading while those for London’s FTSE 100 added 0.6 per cent.
In Hong Kong, Alibaba shares slipped 2.6 per cent a day after the re-appearance of founder Jack Ma, who had been absent from public view for three-months, boosted the Chinese ecommerce group’s stock.
Shares in China Mobile and China Unicom fell by 0.6 and 0.8 per cent, respectively, while China Telecom added 0.4 per cent after the three state-controlled telecommunications groups said they had written to the New York Stock Exchange asking the bourse to review its decision to de-list them.
The US dollar index, which measures the greenback against a basket of its peers, was down 0.1 per cent and is 0.5 per cent lower this week.
Mr Biden’s stimulus programme is expected to accelerate inflation and weigh on the dollar but investors see little chance of the US Federal Reserve responding with an interest rate increase this year.
“While the US dollar index has fallen to 2018 lows, we see room for further weakness given the prospect of more US deficit spending following the Democratic sweep in Washington,” said Solita Marcelli, chief investment officer for the Americas at UBS Financial Services.