Asian shares rise on signs of U.S. economic recovery

by Jonathan Adams
Asian shares

Nikkei 225 index jumped 2.2%, Hang Seng gained 0.6%, Kospi climbed 0.9%, the Shanghai Composite index rose 0.1% and S&P/ASX 200 advanced 1.2%

Asian shares rose Friday, powered by encouraging signs that the U.S. economic recovery from the pandemic is gaining momentum

President Joe Biden’s proposal for a $6 trillion budget boosted buying of shares likely to benefit from heavy government spending.

Tokyo’s Nikkei 225 index jumped 2.2% and other regional benchmarks all were higher.

The Hang Seng in Hong Kong gained 0.6%. In Seoul, the Kospi climbed 0.9%. The Shanghai Composite index rose 0.1% and Sydney’s S&P/ASX 200 advanced 1.2%.

Shares in Chinese online retail giant JD.com Inc.’s logistics arm added 14% on their first trading day in Hong Kong after JD Logistics raised 24 billion Hong Kong dollars ($3.1 billion) by selling a portion of the unit to outside investors.

It is the latest technology company to list in Hong Kong as Beijing ups scrutiny of the industry. Its IPO was the second largest for the market this year after short video firm Kuaishou raised $5.3 billion.

Markets were lifted by mostly positive reports Thursday. The number of Americans who filed for unemployment benefits fell yet again to a pandemic low of 406,000.

Although the Commerce Department reported that sales of durable goods dropped 1.3%, it also released updated data showing the U.S. economy grew at a 6.4% annual rate in Q1 as growing numbers of people got vaccinated, allowing the economy to shift back toward normal activity.

The positive open follows optimism around U.S. economic data boosting the recovery theme and may potentially spur some catch-up growth in Asia indexes, considering that they have been lagging, Jun Rong Yeap of IG said in a commentary.

In another signal that investors were confident about the economy going forward, the Russell 2000 index RUT of smaller stocks fared better than the broader market, picking up 1.1% to 2,273.07.

As they keep an eye on inflation, investors are looking ahead to Friday’s release of the Commerce Department’s personal consumption expenditures index, more commonly referred to as PCE. The Federal Reserve relies on PCE data more than the better known consumer price index, or CPI, when making policy decisions.

Analysts have said they believe price rises are mainly due to the rebound from the slump brought on by the pandemic. Should they persist, the concern is that the Fed will tighten policy and raise interest rates to try to cool it.

Bond yields have edged up this week. The 10-year U.S. Treasury note was trading at a yield of 1.62% on Friday, up from 1.57% on Wednesday. But it has remained around that level for the last two weeks.



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