TSE – Asian Stock Exchanges Move Higher on Wall Street Signals, Outlook for Biden Administration

Asian stock markets opened higher on Wall Street cues and after President Donald Trump overnight pledged a smooth transition to the incoming Biden Administration. With the Democratic Party in control of the Senate following the party’s win of two seats from the state of Georgia, the pathway appears clear to larger US fiscal stimulus programs. The broad KOSPI Index closed up 4% in Seoul to a fresh all-time record, while the SENSEX in Mumbai rose 1.4%, also hitting a record zenith. Tokyo and Hong Kong gained, although Shanghai fell back.

The Nikkei 225 finished up 2.4% as traders weighed prospects for a global economic recovery in 2021, and the chances for greater fiscal stimulus from Washington. The yen drifted lower against the US dollar, regarded as a positive in export-oriented Japan.

A ongoing spike in COVID-19 infections in Japan was shrugged off. A state of emergency for Tokyo and three neighboring prefectures became effective Friday morning, with bars, restaurants and nightspots expected to close doors at 8 pm for the 30 days.

The benchmark Nikkei 225 rose 648.90 to 28,139.03, the first close for the index above 28,000 since Aug. 15,1990. Gaining issue outnumbered losers 193 to 29.

The Nikkei 225 is up 2.5% year-to-date.

In economic news, Japan’s economy is expected to grow 3.4% in the fiscal year ending March 2022, according to a consensus of 35 economists polled by the Japan Center for Economic Research. The pending increase will follow a 5.4% decline in gross domestic product in the current fiscal year ending March 31.

Also, Japan household spending in yen was flat in November year-over-year, but up a real 1.1% due to deflation, reported the official Statistic Bureau. However, spending had been depressed in November a year earlier due to consumer reaction to an Oct. 1 increase in the national sales tax to 10% from 8%. Consumers a year ago front-loaded some October and November outlays into September to sidestep the tax hike, said analysts.

The broad gauge Hong Kong Hang Seng Index finished up 1.2%.

The Hang Seng rose 329.70 to 27,878.22, as gaining issues outnumbered losers 37 to 14.

The Hang Seng TECH index rose 2.7%, despite telecom issues slipping on plans by New York Stock Exchange to delist the issues, to comply with US law.

Leading the upside were Geely Automobile (175:HK), up 19.6% on media reports that the automaker will join forces with China’s tech-giant Baidu (BIDU) to make smart electric vehicles.

The Hang Seng is up 2.4% year-to-date.

On the mainland, the Shanghai Composite fell 0.2% to 3,570.11.

In economic news, a survey of 67 international institutions found that close to 80% of respondents predicted President Joe Biden will either partially or completely remove President Trump’s import tariffs on China-made goods, reported the Harvard Business Review on Thursday.

On the other exchanges, the Taiwan TWSE inclined 1.6%; the Australian ASX 200 inclined 0.7%; the Singapore Straits Times Index rose 3.0%, and the Thai Set inclined 1.5%.