Asian stocks ended broadly higher on Monday amid optimism that falling coronavirus infection rates in different parts of the world and the continued rollout of vaccines will provide a major boost to the economic recovery.
Stimulus news remained in focus as well after U.S. lawmakers approved a budget outline that will allow them to muscle President Biden’s $1.9 trillion Covid-19 relief package through in the coming weeks without Republican support.
House Speaker Nancy Pelosi said she believes the final Covid-19 relief legislation could pass Congress before March 15, when special unemployment benefits that were added during the pandemic expire.
Chinese shares rallied on hopes of a quicker economic revival. Tech shares rose broadly despite the release of new anti-monopoly guidelines over the weekend.
The benchmark Shanghai Composite Index jumped 36.11 points, or 1 percent, to 3,532.45, while Hong Kong’s Hang Seng Index edged up 0.1 percent to settle at 29,319.47.
Japanese shares hit a fresh 30-year high, with sentiment underpinned by dropping Covid-19 cases, better than expected earnings and growing optimism over the global economy.
There were reports that Japan will consider lifting its coronavirus state of emergency in some prefectures ahead of the new deadline, if the situation improves.
Credit ratings agency Fitch said today it is keeping Japan’s sovereign rating at ‘A’ with a ‘negative’ outlook.
“We expect the large fiscal support to be unwound gradually, but downside risks to growth exacerbate the challenge of placing the debt ratio on a downward path over the medium term,” the ratings agency said.
The Nikkei 225 Index spiked 609.31 points, or 2.1 percent, to 29,388.50, marking the highest level since August 1990. The broader Topix closed 1.8 percent higher at 1,923.95, the highest since June 1991.
Kobe Steel soared 17.5 percent after raising its full-year outlook. Similarly, Nippon Steel jumped 10 percent after revising its FY20 business outlook upwards. Rival JFE Holdings advanced 7.4 percent.
The New Zealand market was closed for a public holiday. Australian markets advanced after the country reported no new local coronavirus cases for a third day on Sunday.
The benchmark S&P/ASX 200 Index rose 40.20 points, or 0.6 percent, to 6,880.70 amid gains across the board. The broader All Ordinaries Index ended up 47.90 points, or 0.7 percent, at 7,160.80.
Higher iron ore prices helped lift miners, with BHP, Fortescue Metals Group and Rio Tinto climbing 2-3 percent. Tech stocks gained ground, with Afterpay and Xero rising over 1 percent each.
Vocus Group surged 12.8 percent after the network solutions provider confirmed it has received a multi-billion-dollar takeover offer.
Meanwhile, Seoul stocks fell sharply, dragged down by automakers. The benchmark Kospi dropped 29.39 points, or 0.9 percent, to 3,091.24.
Hyundai Motor slumped 6.2 percent and its affiliate Kia Motors plunged 15 percent after both companies said they are not having talks with Apple over an electric vehicle project. Auto-parts maker Hyundai Mobis plummeted 8.7 percent.
On the Covid-19 front, authorities began allowing restaurants, coffee shops, indoor gyms and other facilities outside the densely populous Seoul metropolitan region to stay open an hour longer after new daily infections fell below 300 for the first time since November 23.
U.S. stocks rose on Friday as upbeat earnings news offset data showing disappointing jobs growth in January.
The Dow Jones Industrial Average rose 0.3 percent, while the tech-heavy Nasdaq Composite gained 0.6 percent and the S&P 500 added 0.4 percent to reach record closing highs.
Market Analysis
Asian Shares Rise On Optimism Over Global Recovery
2021-02-08 08:40:23
