BANGKOK (AP) – Asian shares were mostly higher on Wednesday as investors bet on eventual approval of a relatively big version of President Joe Biden’s pandemic relief bill. The advance followed a broad rally on Wall Street, with solid contributions from Big Tech companies, banks and other sectors.
Tokyo’s Nikkei 225 rose 0.8% to 28,589.22 and the Kospi in South Korea climbed 0.6% to 3,116.38. Australia’s S&P/ASX 200 surged 1.2% to 6,844.90. The Hang Seng in Hong Kong declined 0.4% to 29, 052.90 while the Shanghai Composite index bounced back from earlier losses, gaining 0.1% to 3,536.89.
With Democrats and Republicans remaining far apart on support for President Joe Biden’s $1.9 trillion stimulus package, investors are betting that the administration will opt for a reconciliation process to get the legislation through Congress.
“Positive earnings reports as well as hopes for Biden’s fiscal rescue plan may have bolstered risk sentiment, with U.S. Senate Democrats announcing they would push through with the stimulus bill even without bipartisan support,” Prakash Sakpal and Nicholas Mapa of ING said in a report.
Overnight, Big Tech companies and banks helped power a broad rally on Wall Street Tuesday. Shares in GameStop and other recent high-flying stocks hyped by online traders plunged. The stocks have been caught up in a speculative frenzy by traders in online forums and on social media who seek to inflict damage on Wall Street hedge funds that have bet these stocks would fall.
GameStop plunged 60% to $90 a share, and AMC Entertainment lost 41.2% to $7.82 a share. Both companies have been in the spotlight for more than two weeks as the online community of investors pushed the stocks to astronomical levels.
The price of silver, whose 9% spike on Monday fueled speculation the precious metal was also being hyped by online traders, sank by more than 10%. On Wednesday it was steady, gaining 56 cents to $26.97 an ounce.
Treasury yields rose and the VIX, a measure of fear in the market, fell sharply, a sign volatility was easing.
The S&P 500 index rose 1.4% to 3,826.31. The Dow Jones Industrial Average gained 1.6%, to 30,687.48. The tech-heavy Nasdaq composite climbed 1.6%, to 13,612.78. The Russell 200 index of smaller companies also rose, by1.2% to 2,151.44. The major indexes remain near their all-time highs set last month.
The yield on the benchmark 10-year Treasury note rose to 1.11% from 1.10% late Tuesday.
Investors continue to focus on Washington. to the White House to discuss his proposed $1.9 trillion economic aid plan. Republicans earlier countered with an offer of $600 billion, or less than one-third of Biden’s proposed amount.
Investors bid up stocks heading into 2021 in expectation the rollout of coronavirus vaccines would allow global business and travel to return to normal. That optimism has been dented by infection spikes and disruptions in vaccine deliveries.
In other trading, benchmark U.S. crude oil gained 27 cents to $55.03 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, picked up 25 cents to $57.71 per barrel.
The U.S. dollar rose to 105.01 Japanese yen from 104.98 yen late Tuesday. The euro strengthened to $1.2046 from $1.2042.
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