Asian stocks record high, world leaders react, as Biden inauguration lifts hopes
Asian stocks rose to new record highs, tracking U.S. markets as investors hoped for more economic stimulus from newly inaugurated U.S. President Joe Biden to offset damage wreaked by the COVID-19 pandemic.
Republicans in the U.S. Congress have indicated they are willing to work with the new president on his administration’s top priority, a $1.9 trillion U.S. fiscal stimulus plan, but some are opposed to the plan’s price tag. Democrats took control of the U.S. Senate on Wednesday, but will still need Republican support to pass the program.
But after record high closes on Wall Street overnight, markets in Asia reflected relief over an orderly transition of power and strong expectations that U.S. stimulus will provide continued support for global assets.
Kay Van-Petersen, global macro strategist at Saxo Capital Markets, said that Democratic control of the Senate “increases not just the probability of more fiscal (stimulus), but the magnitude.”
MSCI’s broadest index of Asia-Pacific shares outside Japan touched record highs and was last up 0.85%, with markets across the region posting gains.
Chinese blue-chips added 1.2%, Australian shares climbed 0.69% and Hong Kong’s Hang Seng breached the 30,000 level, rising 0.31%.
Japan’s Nikkei was up 0.72%, less than 1% off three-decade highs reached last week.
The rises in Asia followed fresh record highs on Wall Street overnight. The Dow Jones Industrial Average rose 0.83%, the S&P 500 gained 1.39% and the Nasdaq Composite added 1.97%. On Thursday, e-mini futures for the S&P 500 ticked up to new records, and were last up 0.26%
Tech shares stood out after Netflix Inc said it would no longer need to borrow billions of dollars to finance its TV shows and movies, prompting its shares to surge nearly 17%.
Along with Netflix, the rest of the FAANG group, scheduled to report results in the coming weeks, jumped. Google parent Alphabet Inc rose 5.36%.
As equity gauges rose, U.S. stimulus hopes weighed on the greenback, pushing the dollar index down 0.1% to 90.319.
The dollar was flat against the yen at 103.52 and the euro gained 0.2% on the day to $1.2124.
World Leaders react on Joe Biden’s Inaugural.
New Zealand PM Jacinda Ardern in a statement,
“We have a common investment in the international rules-based order and I welcome President Biden’s intentions for the US to re-join the Paris Agreement and halt its withdrawal from the World Health Organization.”
“President Biden’s message of unity as he takes office is one that resonates with New Zealanders and, on behalf of New Zealand, I wish him well as he begins his presidency.”
South Korean President Moon Jae In,
“@JoeBiden, congratulations on your inauguration. America is back. America’s new beginning will make democracy even greater. Together with the Korean people, I stand by your journey toward ‘America United’.”
Taiwan President Tsai Ing-Wen
“President Tsai wishes the new Biden administration smooth policy implementation, and looks forward to building on the strong foundation of the Taiwan-U.S. partnership to further our bilateral collaboration, as well as the prosperity of, and friendship between, the people of both countries.”
Japanese PM Suga,
“Congratulations to President @JoeBiden and Vice President @KamalaHarris on your inauguration. Japan and the United States are allies tied firmly by bonds and shared universal values.
“I look forward to working with you and your team to reinforce our alliance and to realize a Free and Open Indo-Pacific.”
European Commission President Ursula Von Der Leyen,
“The United States is back. And Europe stands ready. To reconnect with an old and trusted partner, to breathe new life into our cherished alliance. I look forward to working together with @JoeBiden.”
British PM Boris Johnson,
“I look forward to working with him (Biden), and with his new administration, strengthening the partnership between our countries and working on our shared priorities: from tackling climate change, building back better from the pandemic and strengthening our transatlantic security.”
“Under your leadership, may the American people continue to draw strength from the lofty political, ethical and religious values that have inspired the nation since its founding.”
“I likewise ask God, the source of all wisdom and truth, to guide your efforts to foster understanding, reconciliation and peace within the United States and among the nations of the world in order to advance the universal common good.”
Spanish PM Pedro Sanchez
“The (election) victory of Biden represents the victory of democracy over the ultra-right and its three methods, the massive deception, the national division and the abuse, even violent, of democratic institutions... Five years ago, we thought Trump was a bad joke, but five years later we realized he jeopardized nothing less than the world’s most powerful democracy.”
Italian PM Giuseppe Conte,
“We are looking forward to the Biden presidency, with which we will start working immediately in view of our presidency of the G20. We have a strong common agenda, ranging from the effective multilateralism that we both want to see, to climate change, green and digital transition and social inclusion.”
French President Emmanuel Macron, IN A TWEET:
“Best wishes on this most significant day for the American people! We are together. We will be stronger to face the challenges of our time. Stronger to build our future. Stronger to protect our planet. Welcome back to the Paris Agreement!”
Canadian PM Justin Trudeau
Canada and the United States “will continue this partnership as we fight the global COVID-19 pandemic and support a sustainable economic recovery that will build back better for everyone.”
“We will also work together to advance climate action and clean economic growth, promote inclusion and diversity, and create good middle class jobs and opportunities for our people while contributing to democracy, peace, and security at home and around the world.”
Israeli PM Benjamin Netanyahu
“Congratulations President Joe Biden and Vice President Kamala Harris on your historic inauguration. President Biden, you and I have had a warm personal friendship going back many decades. I look forward to working with you to further strengthen the US-Israel alliance, to continue expanding peace between Israel and the Arab world, and to confront common challenges, chief among them the threat posed by Iran.”
Netanyahu’s office released a separate statement on Trump: “President Trump, thank you for all the great things you have done for Israel, especially your historic recognition of Jerusalem as Israel’s capital and bringing four peace agreements between Israel and the Arab world.”
Iranian Foreign Ministry Spokesperson, Saeed Khatibzadeh:
“The DIPLOMATIC VANDALISM of Trump, Pompeo & co stemmed partly from a broken institutional process. But that same process-when ‘functional’-produced disasters like wars in Iraq, Afghanistan & Vietnam. The world knows that only the US can fix itself - in practice; not just words.”
Tedros Adhanom, Director General of World Health Organization:
“Congratulations President @JoeBiden and Vice-President @KamalaHarris on your #Inauguration today. Here’s to a healthier, fairer, safer, more sustainable world!”