Sun, Jan 17, 2021 page14

• Asian markets mostly decline after Biden unveils huge stimulus package

  • AFP, HONG KONG
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  US president-elect Joe Biden’s US$1.9 trillion stimulus proposal was met with a shrug in Asia on Friday as observers said that the massive spending spree had been largely factored into valuations, while profit-taking weighed on markets at the end of a broadly healthy week.

  Reassurances from US Federal Reserve Chairman Jerome Powell that record-low interest rates and loose monetary policy would remain in place for some time removed some lingering angst on trading floors, while there remains plenty of optimism about the long-term economic outlook.

  Surging virus infections and deaths — and the lockdowns they are forcing governments to impose — are the main stumbling blocks for investors, despite the rollout of vaccines that could allow life to return to normal.

  

  A man on Friday walks past an electronic signboard in the dealing room of Hana Bank in Seoul, South Korea, showing the benchmark KOSPI having dropped 2.03 percent to close at 3,085.90.

  Photo: EPA-EFE

  With days before he takes office, Biden unveiled his rescue package, which he said addressed “the twin crises of a pandemic and this sinking economy.”

  The plans include an extra US$1,400 in cash for individuals — to top up the US$600 in last month’s stimulus — a hike in the minimum wage to US$15 an hour and billions of US dollars to ramp up vaccinations so that 100 million are administered in 100 days.

  However, analysts said that while Democrats have control of the US Congress, the spending plans are far from guaranteed to get through untouched.

  While welcomed by investors, the proposals failed to fire a surge in stocks, with Asian markets mostly down.

  In Taipei, the TAIEX on Friday fell below 16,000 points on high turnover, ending down 90.80 points, or 0.58 percent, at 15,616.39 on expanded turnover of NT$433.156 billion (US$15.2 billion).

  Boosted by a 6 percent rise overnight by the American depositary receipts of Taiwan Semiconductor Manufacturing Co (台積電), the weighted index soared 334 points at one point, reaching a record high of 16,041.59 and fluctuating in a wide range of 426.48 points.

  The TAIEX eventually closed below the five-day moving average of about 15,636, but still rose 0.99 percent for the week.

  In Tokyo, the TOPIX lost 0.89 percent to close at 1,856.61, but eked out a 0.09 percent gain for the week.

  South Korea’s KOSPI declined 2.03 percent to 3,085.90, dropping 2.1 percent from a week earlier, while India’s SENSEX lost 1.11 percent to 49,034.67, but increased 0.52 percent on the week.

  Australia’s S&P/ASX 200 held virtually steady, rising 0.1 points to 6,715.4, and declining 0.63 percent from a week earlier.

  The Shanghai Composite Index was up a slight 0.01 percent at 3,566.38, but dropped 0.1 percent from a week earlier.

  Bucking the general trend, Hong Kong’s Hang Seng Index rose 0.27 percent to end at 28,573.86, its highest closing level since Jan. 17 last year. It rose 2.5 percent from a week earlier.

  “Seems like this was already priced in, at least as far as magnitude,” DailyFX head strategist Ilya Spivak said. “The main question is how much of it gets compromised away to get it passed. That is probably the next layer of speculative uncertainty that markets are focused on. Hence the muted response.”
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