Asia report: Most markets higher as investors watch US chaos
Most markets in Asia finished in the green on Thursday, taking their cues from Wall Street overnight, where traders mostly shrugged off violent, deadly riots at the US Capitol in Washington.
In Japan, the Nikkei 225 was up 1.6% at 27,490.13, as the yen weakened 0.49% against the dollar to last trade at JPY 103.54.
Technology giant SoftBank Group was down 1.56%, while among the benchmark’s other major components, robotics specialist Fanuc was up 4.34% and Uniqlo owner Fast Retailing was 1.6% firmer.
The broader Topix index was 1.68% firmer by the end of trading in Tokyo, closing at 1,826.30.
On the mainland, the Shanghai Composite was ahead 0.71% at 3,576.20, and the smaller, technology-centric Shenzhen Composite advanced 0.21% to 2,426.66.
South Korea’s Kospi grew 2.14% to 3,031.68, while the Hang Seng Index in Hong Kong lost 0.52% to 27,548.52.
Telecom plays in the special administrative region helped to drag the index down, after the New York Stock Exchange did another 180-degree turn around whether it would delist such companies in the US.
China Mobile was down 7.18% in Hong Kong, with China Telecom falling 9.38% and China Unicom off 11.35%.
The NYSE had said last week that it would delist the three companies on Wall Street, before announcing earlier this week that it would not make such a move.
In Seoul, the blue-chip technology stocks were in positive territory, with Samsung Electronics up 0.85% and SK Hynix rising 2.67%.
Investor focus during the Asian session was very much on the United States, as rioters broke through security barricades and stormed into the US Capitol Building in Washington.
A pro-Trump protest turned violent as members of Congress were meeting to certify Joe Biden’s win in November’s presidential election.
At the same time, media outlets had called both Senate seats in the Georgia run-off election for the Democrats, giving the party control of the upper chamber.
Those two wins will make it far easier for president-elect Joe Biden to enact policy, as the Democrats now have control of both the House of Representatives and the Senate as well as the White House.
Stephen Innes, chief global market strategist at Axi, said the real impact for markets of the Democrats winning the Georgia run-off was that cross-asset price action was signalling as “unquestionably reflationary”.
He noted that front-month West Texas Intermediate holding above $50 was “the clearest signpost” that vaccine and stimulus-driven reflation trades were back on.
“The most optimistic take is that a razor-thin effective Senate majority curbs tax hikes, both corporate and personal, leaving markets to focus on higher spending that would be consistent with a US Treasury curve bear steepening, an ongoing rally in industrial metals, a rally in emerging market equities, and a weaker US dollar.
“Progress towards improving the US economy's supply-side via infrastructure spending would encourage broad-based short dollar strategies on higher commodity prices and expectations that the US Federal Reserve would allow the economy to 'run hot' and leave policy unchanged in the event of above-target CPI inflation.”
Oil prices were higher as the region went to bed, with Brent crude last up 0.07% at $54.34 per barrel, and West Texas Intermediate rising 0.51% to $50.89.
In Australia, the S&P/ASX 200 was up 1.59% at 6,712.00, as fresh data out of Canberra showed the country’s goods and services exports rising 3% month-on-month on a seasonally-adjusted basis in November.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 1.14% above the waterline at 13,485.67.
The record high close in Wellington was driven by the country’s energy generator-retailers, with Contact Energy up 7.07%, Meridian Energy ahead 10.2%, and Mercury NZ rising 2.86%.
Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.62% at AUD 1.2894, and the Kiwi retreating 0.5% to NZD 1.3777.