By Andrew Galbraith and Chibuike Oguh
SHANGHAI/NEW YORK, Jan 15 (Reuters) - Asian shares edged up
near record highs on Friday after U.S. President-elect Joe Biden
proposed a $1.9 trillion stimulus plan to jump-start the world's
largest economy and accelerate its response to COVID-19.
In prime-time remarks, Biden outlined a proposal that
includes $415 billion aimed at the COVID-19 response, some $1
trillion in direct relief to households, and roughly $440
billion for small businesses and communities hard hit by the
pandemic. Global stocks had initially firmed on Thursday on a report
that the stimulus package could be as big as $2 trillion, much
more than markets were expecting.
Biden's comments came after Federal Reserve Chair Jerome
Powell struck a dovish tone in comments at a virtual symposium
with Princeton University.
Powell said the U.S. central bank is not raising interest
rates anytime soon and rejected suggestions the Fed might start
reducing its bond purchases in the near term. "It's pretty clear that there's going to be significant
stimulus. The vaccines are being rolled out, so you're going to
significant stimulus in a kind of recovery scenario. That is
very bullish for risk assets, particularly as it's unlikely that
interest rates will be rising anytime soon," said Michael
Frazis, portfolio manager at Frazis Capital Partners in Sydney.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was up 0.1% around midday in Asia, just off a
record high. Hong Kong's Hang Seng .HSI added 0.32%, while
Australia's ASX 200 .AXJO rose 0.17%.
Japan's Nikkei .N225 was down 0.21% after touching
three-decade highs in the previous session, Chinese blue-chips
.CSI300 lost nearly 1% amid worries over rising COVID-19 cases
in the country.
More than 28 million people are under lockdown in China. On
Friday it reported the highest number of new COVID-19 cases in
more than 10 months. The gains in Asia followed a late dip on Wall Street on
Thursday. While U.S. stocks spent most of the trading session in
positive territory, helped by the stimulus hopes, concerns over
the cost of the package led to a modest decline toward the end
of Wall Street trade.
S&P 500 e-mini futures EScv1 turned lower on Friday after
Biden's remarks and were last down 0.222% at 3,783.
"The concern is what it's going to mean from a tax stand
point," said Tim Ghriskey, chief investment strategist at
Inverness Counsel in New York.
"Spending is easy to do but the question is how are you
going to pay for it? Markets often ignore politics but they
don't often ignore taxes."
The Dow Jones Industrial Average .DJI fell 0.22%, the S&P
500 .SPX lost 0.38%, and the Nasdaq Composite .IXIC dropped
0.12%.
On Friday, earnings season will kick into full swing with
results from JPMorgan JPM.N , Citigroup C.N and Wells Fargo
WFC.N . Investors will be looking to see if banks are starting
to take down credit reserves, resume buybacks, and provide
guidance that shows the economy is improving, said Thomas Hayes,
chairman of Great Hill Capital in New York.
In the currency market, the U.S. dollar index =USD , which
had rebounded after hitting a nearly three-year low last week,
was little changed on Friday at 90.27, and flat against the yen
at 103.79 JPY= , as Powell's dovish statements offset support
from the stimulus proposal.
The euro EUR= nudged 0.05% lower to $1.2150.
U.S. yields stepped back after earlier rising on higher
inflation expectations. Benchmark 10-year Treasury notes
US10YT=RR yielded 1.1122%, down from a U.S. close of 1.129% on
Thursday, while the 30-year yield US30YT=RR dipped to 1.8514%
from 1.874%.
Oil prices, which had risen on a weak dollar and strong
Chinese import data, were mixed by midday in Asia as COVID-19
concerns in China hit sentiment.
Brent crude oil futures LCOc1 fell 0.27%, to $56.27 a
barrel while U.S. crude CLc1 was 1 cent higher at $53.58.
Spot gold XAU= rose 0.24% to $1,850.77 per ounce.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>