Asia report: Most markets higher after Biden signs stimulus package

Most stock markets in Asia finished in positive territory on the final trading day of the week, taking their cues from Wall Street, where the S&P 500 hit a fresh record high overnight as tech plays rebounded.

In Japan, the Nikkei 225 was up 1.73% at 29,717.83, as the yen weakened 0.55% against the dollar to last trade at JPY 109.11.

Fashion firm Fast Retailing slipped 0.14%, while among the benchmark’s other major components, automation specialist Fanuc was up 3.42% and technology conglomerate SoftBank Group jumped 3.35%.

The broader Topix index gained 1.36% by the end of trading in Tokyo, closing at 1,951.06.

On the mainland, the Shanghai Composite was ahead 0.47% at 3,453.08, and the smaller, technology-heavy Shenzhen Composite managed gains of 0.17% to 2,220.26.

South Korea’s Kospi was 1.35% firmer at 3,054.39, while the Hang Seng Index in Hong Kong was the region’s odd one out, sliding 2.2% to end the day at 28,739.72.

Seoul’s blue-chip technology stocks were above the waterline, with Samsung Electronics up 0.98% and SK Hynix advancing 2.19%.

The positive moves in Asia came after another record-breaking session stateside overnight, as technology stocks advanced after president Joe Biden signed the Democrats’ $1.9trn stimulus package into law.

Democrats in the House of Representatives managed to pass the coronavirus relief in the prior session, after weeks of anticipation amid rising bond yields.

The stimulus will see most American adults receive a $1,400 stimulus cheque as the country climbs out of the Covid-19 economic crisis.

“The new fiscal aid package should, in theory, back the reflation trade and encourage a further migration from growth to value stocks, although keeping the investor appetite strong enough, as, at the end of the day, stimulus is good for investor mood,” said Swissquote senior analyst Ipek Ozkardeskaya.

“But, because the fresh stimulus package has been priced in since weeks [ago], the concrete news didn’t shake up the sovereign bond yields”

Ozkardeskaya noted that the US Treasury 10-year yield remained stable near 1.55%, adding that investors were now “ready to stomach” an advance towards the 2% mark.

“The slower the rise, the better the appetite, of course.”

Oil prices were lower as the region entered the weekend, with Brent crude last down 0.04% at $69.60 per barrel, and West Texas Intermediate falling 0.21% to $65.88.

In Australia, the S&P/ASX 200 was 0.79% higher at 6,766.80, as the energy and materials subindices advanced 1.47% and 1.62%, respectively.

The country’s main oil plays were higher, with Beach Energy up 1.16%, Oil Search rising 1.84%, and Santos ahead 0.7%.

On the materials front, miners BHP, Fortescue Metals and Rio Tinto were 2.5%, 2.31% and 0.82% in Sydney, respectively.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 rose 1.26% to 12,426.77, led higher by airport operator AIAL, which was ahead 6.3%, while flag carrier Air New Zealand was 4.1% firmer.

Hopes that vaccine programmes could open up borders globally boosted the travel sector in Wellington in recent sessions, as the country’s border remains effectively closed, strangling its large tourism industry.

The down under dollars were both weaker against the greenback, with the Aussie last off 0.55% at AUD 1.2909, and the Kiwi retreating 0.82% to NZD 1.3948.