Asian stock markets followed Wall Street on Friday, hoping that Washington would provide more support to the struggling US economy.
Benchmarks advanced in Shanghai, Hong Kong, South Korea and Australia. Tokyo was off 0.1%.
Wall Street benefited on Thursday following President Donald Trump’s suggestion and overturned his decision to stop negotiations on economic aid. Separately, a report indicated that America’s record pace of jobs could slow.
Stock prices have become volatile since mid-September as investors swing amid optimism about the potential development of the coronovirus vaccine and reject that markets have recovered too quickly and are too expensive.
In a report Mizuho Bank stated, “The nature of fiscal stimulus discussions in the US hardly inspires lasting confidence.” “The uncertainty surrounding the presidential election on November 3 will persist not only on the day of voting but possibly later.”
The Shanghai Composite Index, trading resumed after a week’s holiday, rose 1.6% to 3,271.08. Nikkei 225 in Tokyo closed 0.1% down at 23,613.20 while Hang Seng in Hong Kong closed down 0.1% at 24,194.68.
Sydney’s S & P-ASX 200 rose 0.1% to 6,108.50. New Zealand, Singapore and Indonesia advanced.
Trump said in a TV interview that “very productive” negotiations began at greater stimulus after supplementary unemployment benefits that supported consumer spending, the engine of the American economy, came to an end.
It helped fuel optimism that Republicans and Democrats would deliver another aid package after weeks of uncertainty.
Wall Street’s benchmark S&P 500 index rose 0.8% to 3,446.83. The Dow Jones Industrial Average rose 0.4% to 28,425.51. Nasdaq Composite rose 0.5% to 11,420.98.
Banks, technology and communications companies benefited immensely.
Energy stocks gained as US crude oil prices rose more than 3%. Petroleum sometimes climbed 8.8%, being the largest beneficiary in the S&P 500.
A government report showed that 840,000 workers applied for unemployment benefits last week. This is slightly less than the previous week’s 849,000.
Many sectors of the economy have been slow recently. Investors have focused on whether Congress can provide more support.
Trump on Tuesday said he asked his representatives to stop the negotiations after the November election because he said that Speaker of the House Nancy Pelosi was negotiating in bad faith. This caused the stock to fall 1.4%.
Trump said he would later be open to assisting the airline industry and $ 1,200 in payments to Americans. In response, the stock gained momentum on Wednesday.
Pelosi spoke with Treasury Secretary Steven Menuchin on Wednesday about the measure to aid airlines, but said Thursday that they should be part of a more expansion bill.
On Thursday, Trump said he stopped talking “because they were not working. Now, they are starting to work.”
Some investors also see rising poll numbers for Joe Biden in the upcoming presidential election as indicated by Trump saying more stimulus may be on the way. If Democrats sweep the White House, Senate, and House of Representatives, they say a larger defense package becomes more likely. And it can compensate for higher taxes and stricter regulations that can also create a Democratic-controlled government.
Critics still find stocks to be expensive relative to corporate profits. US-Chinese are boiling tensions over trade and technology.
France reported a record number of infections on Wednesday. Germany is seeing an upsurge in new coronovirus infections, raising fears that a pandemic is on the rise in a country far better than many of its European neighbors. The UK is considering what new controls are among the evidence measures that have failed to control the virus.
In energy markets, benchmark US crude on the New York Mercantile Exchange fell 9 cents to $ 41.10 a barrel. The contract increased from $ 1.24 to $ 41.19 on Thursday. Brent crude, which is used to price international oils, is 8 cents to $ 43.26 per barrel in London. It rose $ 1.35 to $ 43.34 per barrel in the previous session.
The dollar was down to 105.82 yen against Thursday’s 106.02 yen. The euro rose from $ 1.1758 to $ 1.1780.