Asian Stocks Up, Boosted by “Very Productive” U.S. Stimulus Talks

Tradehay.com: 02/02/2021 - 06:09

Asia Pacific stocks were up on Tuesday morning, advancing alongside their U.S. counterparts as talks were held about further U.S. stimulus measures. Concerns over volatile trading receded and progress on COVID-19 vaccinations also boosted investor sentiment.

Japan’s Nikkei 225 gained 0.96% by 10:01 PM ET (3:01 AM GMT) and South Korea’s KOSPI jumped 2.30%.

In Australia, the ASX 200 gained 1.28%. The Reserve Bank of Australia will hand down its policy decision later in the day.

Hong Kong’s Hang Seng Index rose 1.60 %. China’s Shanghai Composite was up 0.42% and the Shenzhen Component rose 1.23%.

Investor sentiment was boosted after a “very productive” two-hour meeting on Monday between U.S. President Joe Biden and a group of ten Republican senators who proposed a downsized COVID-19 stimulus package.

However, Biden is insisting on keeping the $1.9 trillion price tag that he proposed in January, saying that the downsized effort does not go far enough to solve the COVID-19 crisis.

Biden told the group “that he will not slow down work on this urgent crisis response and will not settle for a package that fails to meet the moment,” White House spokeswoman Jen Psaki said.

Fears that speculative buying will derail the equity bull market after the market volatility seen during the previous week also receded, adding to shares’ gains.

“We’re still positive on equities while acknowledging the near-term risk of more volatility … our view of a second half recovery supported by improvement from COVID-19 is still intact. The pace of recovery could vary by region, but the outlook of the U.S. and China, the world’s two largest economies, remains positive,” JPMorgan (NYSE:JPM) Asset Management chief Asia market strategist Tai Hui told Bloomberg.

Positive news came on the vaccine front, with the number of Americans who have received their first dose of the COVID-19 vaccine exceeding the number that tested positive for the virus. Across the Atlantic, German Chancellor Angela Merkel has vowed to offer all Germans a vaccine by the end of September, even if new shots are not approved by then.

Earnings season continues, with Alibaba (NYSE:BABA) Group Holding Ltd (HK:9988) and GlaxoSmithKline PLC (LON:GSK) among the companies announcing their results throughout the week.

The Bank of England will hand down its policy decision on Thursday.

On the data front, the U.S.’ January payrolls report is due to be released on Friday. The report, which includes non-farm payrolls, will provide investors with a first glimpse of hiring in 2021.