Asian Stocks Largely Higher, Following Wall Street Rally | Economic news
By YURI KAGEYAMA, AP Business Writer
TOKYO (AP) – Asian stocks were mostly higher on Tuesday after another rally to an all-time high on Wall Street.
Stocks rose broadly, with companies releasing much stronger summer earnings reports than analysts had expected. Historically low interest rates, along with strong corporate earnings growth, have helped the S&P 500 more than double from the low reached in March 2020 at the start of the coronavirus pandemic.
On Monday, the S&P 500 rose 0.5% to 4,566.48, breaking a record set Thursday. The Dow Jones Industrial Average also hit a record high, gaining 0.2% to 35,741.15. The Nasdaq composite rose 0.9% to 15,226.71.
In Tuesday’s trading, the Japanese benchmark Nikkei 225 rose 1.8% to 29,100.57. The advance was helped by a 2% jump in electronics and entertainment Sony Corp., which will report profits later this week. Sony, which has video game and film divisions, saw sales increase as people switched to home entertainment during the pandemic.
“Sentiments in Asia could largely reflect Wall Street’s exceptional performance overnight, while the COVID-19 situation in China remains under scrutiny with tightened controls,” said Yeap Jun Rong, market strategist at IG in Singapore.
China has reimposed travel restrictions in some areas to tackle virus outbreaks that add to concerns over the slowing economy.
Hong Kong’s Hang Seng fell 0.4% to 26,021.39. The Shanghai Composite was stable at 3,610.56.
South Korea’s Kospi edged up 0.6% to 3,037.21 after the government said the economy grew at an annual rate of 4%, according to government data. It was a little lower than expected. But analysts expect consumer spending to pick up as virus cases decline with the progress of the vaccine rollout in the country.
The Australian S & P / ASX 200 gained 0.2% to 7,455.90.
On Wall Street, Tesla hit the biggest gain of the S&P 500 after Hertz announced it would buy 100,000 Model 3 vehicles for its fleet. The landmark deal for the electric vehicle industry pushed Tesla up 12.7%. Because it is one of the most important stocks in the market, its movements have a disproportionate effect on the S&P 500.
So far, companies in the S&P 500 have reported third quarter profits that were nearly 46% higher than a year ago. This allowed the companies in the index to post overall growth of around 32.5%, according to FactSet. This compares to expectations of about 27% growth at the end of the third quarter on September 30.
Several of the market’s most influential stocks are expected to post their own earnings over the coming week. This includes Apple, Microsoft, Amazon, and Google’s parent company, Alphabet. Because these are the four biggest companies on Wall Street in terms of market value, their stock movements have a huge effect on the S&P 500, even more so than Tesla’s.
Moderna rose 7% after reporting encouraging data on the use of its COVID-19 vaccine in children.
Shares of energy companies surged after the price of US oil surpassed $ 85 a barrel in the morning. This is the first time this has happened in about seven years, although the price has come down over the day.
Benchmark US crude gained 11 cents to $ 83.87 a barrel in electronic trading on the New York Mercantile Exchange. It closed Monday at $ 83.76 a barrel.
Brent crude, the international standard, gained 12 cents to $ 85.29 a barrel.
Contrary to previous Federal Reserve comments, Fed Chairman Jerome Powell said on Friday that inflation is expected to remain elevated for much of next year amid erased supply chains and shortages. This could put pressure on the central bank to end the record interest rates it is offering to support markets and the economy.
The central bank is preparing to slow down its monthly bond purchases to keep long-term interest rates low in the near future, but a move in short-term interest rates does not appear imminent.
The 10-year Treasury yield climbed to 1.64% from 1.63% on Monday night.
In currency trading, the US dollar rose from 113.71 yen to 113.91 Japanese yen. The euro cost $ 1.1606, compared to $ 1.1611.
AP Business Writers Damian J. Troise and Stan Choe contributed.
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