MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.46%, S&P/ASX 200 inched up 0.24%, CSI300 index rose 0.45%, and Nikkei futures added 0.35% to 29,055 points
Asian shares extended gains on Thursday after the Federal Reserve said it was too early to consider rolling back emergency support for the economy, and U.S. President Joe Biden proposed a $1.8 trillion stimulus package.
Fed Chair Jerome Powell said on Wednesday that “it is not time yet” to begin discussing any change in policy after the U.S. central bank left interest rates and its bond-buying programme unchanged, despite taking a more optimistic view of the country’s economic recovery.
Biden proposed the sweeping new $1.8 trillion plan in a speech to a joint session of Congress on Wednesday, pleading with Republican lawmakers to work with him on divisive issues and to meet the stiff competition posed by China.
He also made an impassioned plea to raise taxes on corporations and rich Americans to help pay for what he called the “American Families Plan” in his maiden speech to Congress. He has also proposed nearly doubling the tax on investment income, which knocked stock markets last week.
Stephen Dover, Franklin Templeton’s chief market strategist in California, said the effect of the tax package on markets is hard to measure for now.
If it passes, I think it will have an impact on individual stocks that will pay a higher rate of tax or companies with founders that will pay capital gains and could sell stocks, he said. I think investors are going to think about whether they want take their gains now and that creates the possibility of short-term volatility now.
MSCI’s broadest index of Asia-Pacific shares outside Japan built on early gains and rose 0.46% by mid-afternoon.
Australia’s S&P/ASX 200 inched up 0.24%, as strong oil prices lifted energy stocks.
China’s blue-chip CSI300 index rose 0.45%, while Hong Kong’s Hang Seng index advanced half a percentage point. Seoul’s KOSPI was flat while Taiwan shares gained 0.17%.
Markets in Japan were closed for a holiday but Nikkei futures added 0.35% to 29,055 points.
Tech shares got a boost after Apple Inc on Wednesday posted sales and profits ahead of Wall Street expectations, though it warned a global chip shortage could dent iPad and Mac sales by several billion dollars.
European and U.S. markets were set to open higher as well, with FTSE futures up 0.15%. E-mini futures for the S&P 500 index gained 0.53% and Nasdaq futures added 0.87%.
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