Global equities rose yesterday, with Japan’s Nikkei 225 benchmark hitting a 30-year high, after US President Donald Trump signed a US$900 billion economic aid package.
Wall Street on Monday set fresh records after Trump opted not to veto the bill, helping to staunch uncertainty as governments reimposed travel and business curbs due to the COVID-19 pandemic, weighing on global economic activity.
Investors and economists had been pushing for the support for months.
Photo: AFP
It combines US$900 billion of COVID-19 aid with a US$1.4 trillion spending bill and reams of other unfinished legislation on taxes, energy, education and healthcare.
The hope is that the measures would help tide the US economy over until vaccinations can bring surging COVID-19 infections under control, allowing precautions to be relaxed and life to begin returning to normal.
Wall Street futures looked set for further gains, with the contract for the S&P 500 up 0.5 percent, while Dow Jones Industrial Average futures added 0.4 percent.
Germany’s DAX on Monday picked up 0.4 percent to 13,848.41 and the CAC 40 in France climbed 0.4 percent to 5,608.02, while the FTSE 100 in London jumped 2.1 percent to 6,642.12.
Trading was thinning as tumultuous year draws to a close, but after nosediving in March as the pandemic took hold, share prices have more than recovered, helped by massive infusions of central bank cash and ultra-low interest rates, which make shares potentially more lucrative than other investments.
Investors have gained confidence with the rollouts of COVID-19 vaccinations they hope would pave the way for a return to normal activity.
“It has been a mostly positive day for Asian markets, taking their cue from Wall Street,” Jeffrey Halley of Oanda Corp said in a commentary. “The buy everything recovery trade was back in evidence in Asia, with the US dollar easing, and precious metals and energy rallying.”
In Tokyo, the Nikkei 225 yesterday jumped 2.7 percent to 27,568.15, the first time it had traded above 27,000 since August 1990, according to FactSet.
The market hit its all-time peak close of 38,915.87 on Dec. 29, 1989.
The benchmark was buoyed by strong gains in heavyweight shares such as Mitsubishi Heavy Industries Ltd, which surged 4.6 percent, apparel maker Fast Retailing Co, also up 4.6 percent, and technology and energy company Softbank Group Corp, which gained 4.2 percent.
Other Asian indices were also mostly higher.
Hong Kong’s Hang Seng index rose 0.9 percent to 26,568.49, South Korea’s KOSPI edged 0.4 percent higher to 2,820.50 and Australia’s S&P/ASX 200 climbed 0.5 percent to 6,700.30.
The Shanghai Composite index fell 0.5 percent to 3,386.57.
Sentiment has been darkened by tightening US rules against investments in companies linked to the Chinese military. Regulatory changes focused on e-commerce giant Alibaba Group Holding Ltd (阿里巴巴) and its financial affiliate, Ant Group Co (螞蟻集團), were also cause for uncertainty.
In US trading on Monday, the S&P 500 climbed 0.9 percent to 3,735.36, as investors welcomed Trump’s decision to sign the aid package, despite his complaints. The legislation also averted a US federal government shutdown that otherwise would have begun on Tuesday next week.
The Dow Jones Industrial Average gained 0.7 percent to 30,403.97, a record high.
The NASDAQ composite climbed 0.7 percent to 12,899.42, also a record high.
The Russell 2000 index of smaller companies fell 0.4 percent to 1,996.25.
The US economy continues to deteriorate under COVID-19 outbreaks, infections and hospitalizations, so the promise of more relief for millions of Americans helps reduce uncertainty amid the reimposition of travel and business curbs in response to a new COVID-19 variant that is thought to be more contagious.
Trading is expected to be light this week, as most fund managers and investors have closed their books for the year. It is another holiday-shortened week, with New Year’s Day on Friday.
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