Asian stocks rally as U.S. shares hit record levels

by Jonathan Adams
Nikkei 225

The Nikkei 225 climbed 1.46%, the Topix index gained 0.62%, the Kospi added 0.5%, the Shanghai composite rose 0.43% while the Shenzhen component advanced 1.164%

Stocks in Asia jumped Friday after U.S. shares reached record levels on optimism about a stimulus-aided economic recovery. Trading should be light with holidays across the region.

Japan and South Korea advanced on below-average volume following the S&P 500’s first close above 4,000, as investors weighed President Joe Biden’s $2.25 trillion spending plan and signs of faster expansion. Technology shares drove gains, though value stocks also joined the rally. U.S. equity futures rose.

The Nikkei 225 climbed 1.46% in afternoon trade as shares of Softbank Group rose 4.54%. The Topix index gained 0.62%. In South Korea, the Kospi added 0.5%.

Mainland Chinese stocks also edged higher. The Shanghai composite rose 0.43% while the Shenzhen component advanced 1.164%.

Major regional markets in Asia-Pacific including Australia, Hong Kong, India and Singapore are closed for Good Friday. Elsewhere, markets in the U.S. and UK will also be closed for Good Friday.

Treasuries bounced back after the worst quarter in decades with 10-year yields dropping below 1.7%. The dollar retreated. Oil jumped after the OPEC+ alliance agreed to boost output gradually.

Investors are cheering increasing signs of strength in the U.S. economy. Manufacturing growth surged ahead in March, and government job-market data due Friday are expected to show the first in a series of outsized monthly increases. Biden’s plan to rebuild infrastructure has added to the growth outlook, though questions remain about how much can actually be delivered.

Traders for now are looking past worsening virus trends, such as Chile’s move to close its borders for April and a lockdown in France. They remain focused on inflation risk as central banks reassert their commitment to low interest rates.

Before you worry about inflation, there’s reflation and I think that’s the main theme in the market, said Ed Campbell, fund manager and managing director at QMA.

This article is for information purposes only.
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