Asian Equities Rally

Asia Markets Higher After Wall Street Gains

Asia Pacific stock markets were off to a positive start today on the back of positive regional data and Wall Street finishing on a positive note. Overnight, the S&P 500 gained 0.37%, with technology outperforming. The NASDAQ leapt by 1.54%, with the Dow Jones almost unchanged.

Month-end rotation trades dominated proceedings after the ADP data and the Biden infrastructure package caused no ructions in the US bond market. I suspect the news was priced into financial markets at a much higher level than I expected, muting its impact.

President Joseph Biden announced the first details of his highly anticipated infrastructure program yesterday. The package itself totaled around USD2.25 trillion of spending over 10 years, with approximately USD1.60 trillion of corporate tax rises phased in over 15 years.

Biden did not mention the expected hike in income taxes for higher earners or on capital gains taxes, which will be needed in order to pay for the massive package.

US futures were modestly higher today, and Japan’s PMI and Tankan tailwind lifted the Nikkei by 0.60%, with the KOSPI rising 0.55%. Mainland China’s Shanghai Composite and Shanghai Shenzhen CSI 300 advanced 0.85%, with Hong Kong climbing 0.70%.

In ASEAN, Singapore was 0.20% higher, while Kuala Lumpur had risen by 0.50%, with Jakarta unchanged as a weaker rupiah weighed on sentiment. Australian markets have risen more modestly than the month-end exuberance seen yesterday, with the ASX 200 edging 0.20% higher and the All Ordinaries rallying 0.55%.

With much of Asia Pacific on holiday for Good Friday, activity was somewhat muted, especially with the US Non-Farm Payrolls to come Friday night.

Asia’s performance today should be enough to lift European shares at the open, although France’s national lockdown, and Ontario’s in Canada, are likely to take the edge off bullish spirits. Pan-Europe PMI data should lift proceedings if it performs positively as expected.

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