Asian stocks scaled to record highs on Thursday as investors were hopeful the incoming Biden administration will be able to secure passage of a massive new stimulus package to cushion the economic damage of the COVID-19 pandemic.
Republicans in the U.S. Congress have indicated they are willing to work with President Joe Biden on his administration’s top priority, a $1.9 trillion U.S. fiscal stimulus plan, but some are opposed to the price tag. Democrats took control of the U.S. Senate on Wednesday, though they will still need Republican support to pass the program. But after record high closes on Wall Street Wednesday, 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.”
Japan’s Nikkei was up 0.82%, 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 0.34% higher.