TOKYO — Asian shares rose Monday amid some hopes for recovering economies slammed by the pandemic, as market attention turned to upcoming company earnings.
Japan’s benchmark Nikkei 225 gained nearly 0.5% in morning trading to 28,767.43. Australia’s S&P/ASX200 added 0.4% to 6,829.60. South Korea’s Kospi gained 1.4% to 3,183.52. Hong Kong’s Hang Seng jumped 1.6% to 29,927.31, while the Shanghai Composite gained 0.4% to 3,619.25.
Hopes are high that once the pandemic comes under some control, regional economies will make strong recoveries, with lockdowns easing, compared to last year, and vaccines rollouts starting in various places, including Singapore.
But worries that have rippled through markets over the coronavirus pandemic remain, including resurging cases in some parts of China and in Japan.
“Vaccine breakthroughs make it likely that life will become more functional again at some point in 2021, resulting in higher GDP growth and more robust corporate earnings,” said Stephen Innes, chief global markets strategist at Axi.
“But increasing global COVID19 infections, new variants of the virus, tightening social distancing restrictions and delays in vaccine rollouts in some places, all increase the near-term growth risks.”
Wall Street had a mixed finish last week for the major stock indexes.
The S&P 500 slipped 0.3% to 3,841.47, snapping a three-day winning streak. It notched a 1.9% gain for the week. The index was coming off two straight all-time highs. The Dow Jones Industrial Average dropped 0.6% to 30,996.98. The Nasdaq inched up 0.1% to 13,543.06, another record high. The Russell 2000 added 1.3% to 2,168.76.
Investors weighed another batch of company earnings reports Friday. The big theme in the early part of this earnings season is that most companies are handily beating Wall Street’s profits expectations for the last three months of 2020, with banks and some other industries leading the way. About 13% of the companies in the S&P 500 have reported results so far.
Markets have been mostly rallying recently on hopes that COVID-19 vaccines will lead to a powerful economic recovery later this year as daily life gets closer to normal. Hopes are also high that Washington will deliver another dose of stimulus for the economy now that the White House and both houses of Congress are under single control of the Democrats.
President Joe Biden has proposed a $1.9 trillion plan to send $1,400 to most Americans and deliver other stimulus for the economy. But his party holds only the slimmest possible majority in the Senate, raising doubts about how much can be approved. Several Republicans have already voiced opposition to parts of the plan.
The coronavirus pandemic is also worsening and doing more damage to the economy by the day. In Europe, a survey of purchasing managers showed on Friday that activity in the manufacturing and services sectors shrank during January in the 19-country eurozone. The data suggests the eurozone’s economy may contract again this quarter.
In China, where the pandemic began in late 2019, the government has reimposed travel controls after outbreaks in Beijing and other cities. A spike in infections has authorities calling on the public to avoid travel during February’s Lunar New Year holiday, normally the year’s most important family event.
The U.S. economy has also been taking hits recently, with reports showing weakness in the job market and falling confidence among shoppers. But the data has been mixed.
Massive support from central banks is providing a major underpinning for the markets. The Federal Reserve and others are holding short-term interest rates at record lows, among other measures to support economies until the pandemic can be brought under control.
In other trading, benchmark U.S. crude fell 5 cents to $52.22 a barrel in electronic trading on the New York Mercantile Exchange. It lost 86 cents to $52.27 per barrel on Friday. Brent crude, the international standard lost 14 cents to $55.27 a barrel.
The U.S. dollar fell to 103.78 Japanese yen from 103.83 yen late Friday. The euro cost $1.2170, inching up from $1.2169.
Yuri Kageyama, The Associated Press