Asian shares mostly higher after US rally, aid package hopes
Economists say the outlook is grim without such support, and the chair of the Federal Reserve has said repeatedly it will likely be necessary.
Tokyo: Asian shares were mostly higher in muted trading on Monday, as worries about the pandemic kept optimism in check despite a rally that closed out last week on Wall Street.
Investors growing wary over upcoming earnings reports have been cashing in recent gains, helping pull Japanese shares lower. Tokyo’s benchmark Nikkei 225 index lost 0.3% to 23,543.95. Big exporters logged some of the largest losses, with Toyota Motor Corp falling 0.6% and Honda Motor Co shedding 1.8%.
Japan reported core private sector machinery orders edged 0.2% higher in August, contrary to forecasts for a decline. But overall, economic indicators remain weak.
Other regional benchmarks were rising. South Korea’s Kospi gained 0.6% to 2,406.87.
Australia’s S&P/ASX 200 inched up nearly 0.2% to 6,113.40. Hong Kong’s Hang Seng jumped 1.3% to 24,434.17, while the Shanghai Composite added 1.7% to 3,325.98.
“While US politics remain centre stage, a string of Asia releases and monetary policy meeting decisions will be watched this week,” said Jingyi Pan, senior market strategist at IG in Singapore, referring to central bank meetings in South Korea, Indonesia and Singapore.
Indicators out of China, such as trade and inflation readings also remain on investors’ minds.
Wall Street closed out its best week in three months on Friday as negotiations on Capitol Hill aimed at delivering more aid to the ailing US economy encouraged investors.
The S&P 500 rose 0.9% to 3,477.14, its third straight gain. The benchmark index ended the week with a 3.8% gain, its strongest rally since early July.
Signs as of late Sunday were not promising. A new White House coronavirus aid proposal got bad reviews from both ends of the political spectrum. House Speaker Nancy Pelosi rejected the most generous Trump administration plan to date as “one step forward, two steps back.” The Republicans who control the Senate are dismissing it as too expensive and a political loser for conservatives.
On Friday the White House increased its offer to $1.8 trillion, up from $1.6 trillion, according to a Republican aide familiar with the plan. Pelosi’s most recent public proposal was about $2.2 trillion, though that included a business tax increase that Republicans won’t go for.
Worries persist that Congress and the White House won’t deliver more support for the economy as it reels from the impact of the pandemic and concerns that stock prices simply got too high during the summer.
Economists say the outlook is grim without such support, and the chair of the Federal Reserve has said repeatedly it will likely be necessary.
The Dow Jones Industrial Average gained 0.6% to 28,586.90, creeping into positive territory for the year. The Nasdaq composite climbed 1.4%, to 11,579.94, while the Russell 2000 index of small-company stocks jumped 0.6% to 1,637.55.
Other major challenges remain, chief among them the still-spreading coronavirus pandemic, highlighted by Trump’s own COVID-19 diagnosis.
In energy trading, benchmark U.S. crude lost 35 cents to $40.25 a barrel in electronic trading on the New York Mercantile Exchange. It lost 59 cents to $40.60 per barrel on Friday.
Brent crude, the international standard, fell 37 cents to $42.48 a barrel.
The US dollar rose to 105.54 Japanese yen from 105.53 yen last Friday. The euro slipped to $1.1821, from $1.1824.
