Asia report: Most markets higher as Democrats pass US stimulus

Most markets in Asia finished in positive territory on Thursday, with stocks in China and Korea leading the gains, following a solid session on Wall Street overnight after House Democrats in Washington managed to pass president Joe Biden’s $1.9trn coronavirus relief package.

In Japan, the Nikkei 225 was up 0.6% at 29,211.64, as the yen weakened 0.04% against the dollar to last trade at JPY 108.42.

Of the major components on the benchmark index, robotics specialist Fanuc was up 0.29%, Uniqlo owner Fast Retailing added 3.36%, and technology giant SoftBank Group was ahead 1.68%.

The broader Topix index was 0.27% firmer by the end of trading, closing at 1,924.92.

On the mainland, the Shanghai Composite gained 2.36% to 3,436.83, and the smaller, technology-heavy Shenzhen Composite was also ahead 2.36%, settling at 2,216.48.

The gains in China came after negative moves in recent sessions, which were on the back of a lower GDP growth target from authorities in Beijing.

Leaders in the People’s Republic had also signalled recently that they would begin to move away from economically-supportive measures as the country recovered from the Covid-19 crisis.

South Korea’s Kospi was 1.88% higher at 3,013.70, while the Hang Seng Index in Hong Kong was up 1.65% to 29,385.61.

The blue-chip technology stocks were stronger in Seoul, with Samsung Electronics up 1.36% and SK Hynix rising 3.01%.

Sentiment was positive at the start of the Asian session, after Democrats in the US House of Representatives passed Joe Biden’s huge stimulus package designed to underpin America’s emergence from the coronavirus pandemic.

The president was expected to sign the bill on Friday.

“While US markets managed to finish another record-breaking day higher with the Dow setting new records, it was notable that for all the chatter about weaker bond yields being supportive of the highly-valued tech sector, that the Nasdaq finished the day lower,” said CMC Markets chief market analyst Michael Hewson.

“Last night’s Treasury auction turned out to be a bit of an anticlimax, with demand for the 10-year sufficiently robust to allay investor concerns about a lack of enthusiasm for US treasuries, while President Biden signed off on the latest $1.9trn US stimulus package.

“Asia markets took their cues from the positive finish in the US.”

Oil prices were higher as the region went to bed, with Brent crude last up 1.15% at $68.68 per barrel, and West Texas Intermediate ahead 1.2% at $65.21.

In Australia, the S&P/ASX 200 was the region’s odd one out, slipping just 0.003%, or 0.2 points, to 6,713.90, as the hefty financials subindex lost 0.38%, although the energy and materials sectors were in the green.

The country’s major miners were mixed, with BHP falling 1.68%, while Fortescue Metals added 2.21% and Rio Tinto rose 1.06%.

New Zealand’s S&P/NZX 50 managed gains of 0.17% to 12,272.48, with travel stocks leading the gains after the Australian government announced support for airlines, and indicated the reopening of its borders for international travel in October.

Such a move is expected to boost the travel and tourism sectors on both sides of the Tasman Sea, as both New Zealand and Australia are heavily reliant on each other’s citizens for short-term visitor arrivals.

Flag carrier Air New Zealand was up 3.3%, while Tourism Holdings and travel software company Serko both added 0.9%.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.5% at AUD 1.2862, and the Kiwi advancing 0.45% to NZD 1.3833.