Asian stocks advanced with U.S. futures after Democrats took control of the Senate following key elections, amid expectations that President-elect Joe Biden will boost fiscal stimulus. Treasuries held overnight losses.
Stocks rose across much of the region, with a gauge of Asia-Pacific shares on track for another record. S&P 500 and Nasdaq 100 futures also climbed after the Democrats won two key Georgia runoffs, boosting speculation of a torrent of spending to revive growth and reigniting the reflation trade.
Earlier, the S&P 500 trimmed an advance of as much as 1.5% but still closed in the green, after protesters stormed the U.S. Capitol. Calm was later restored. Elsewhere, the dollar was steady. Oil edged up and gold was little changed.
Hong Kong missed out on the Asia rally, weighed down by declines in Alibaba Group Holding Ltd. and Tencent Holdings Ltd. after reports that the Trump administration may bar investments in China’s two most valuable companies. The New York Stock Exchange’s plan to delist three major Chinese telecommunications firms also sapped sentiment.
Investors focused on the policy implications of the Democrats winning control of the U.S. Senate, as lawmakers resumed a politically charged debate over the legitimacy of the presidential election. Hours earlier, a pro-Trump mob had stormed the U.S. Capitol and driven lawmakers from their chambers.
“Disturbing as it is and with the Capitol now being cleared, share markets in Asia appear to be looking through it and choosing to focus on the prospects for more stimulus coming from the outcome in Georgia,” said Shane Oliver, head of investment strategy and chief economist at AMP Capital.
In the latest minutes released Wednesday, the Federal Open Market Committee issued guidance it would continue purchases of bonds at least at its current pace until the economic recovery had made “substantial further progress.”
Meanwhile, shares of Twitter Inc. dropped after the platform suspended President Donald Trump’s account.
These are some of the main moves in markets:
- S&P 500 futures rose 0.6% as of 12:15 p.m. in Tokyo. The S&P 500 gained 0.6%.
- Japan’s Topix index climbed 2.1%.
- Australia’s S&P/ASX 200 Index climbed 1.8%.
- South Korea’s Kospi index rose 2.2%.
- Hong Kong’s Hang Seng Index fell 0.1%.
- Shanghai Composite Index added 0.2%.
- The yen was at 103.15 per dollar.
- The offshore yuan traded at 6.4415 per dollar.
- The Bloomberg Dollar Spot Index was little changed.
- The euro was at $1.2325.
- The yield on 10-year Treasuries rose about one basis point to 1.04% after surging eight basis points.
- Australia’s 10-year bond yield rose one basis points to 1.08%.
- West Texas Intermediate crude climbed 0.9% to $51.05 a barrel.
- Gold was at $1,917 an ounce, little changed.
— With assistance by Rita Nazareth, Vildana Hajric, and Joanna Ossinger
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