Global shares mostly up on optimism for stimulus from Joe Biden

Global shares mostly rose on Thursday on optimism over the new US administration that earlier set off a rally on Wall Street.

Hopes are high that President Joe Biden's administration will mean more support for the struggling US economy, starting a recovery that's crucial for the export-driven Asian region and the rest of the world.

France's CAC 40 gained 0.4 per cent in early trading to 5,648.29, while Germany's DAX rose 0.6 per cent to 14,003.82. Britain's FTSE 100 edged up nearly 0.2 per cent to 6,753.08. US shares were set to drift higher with Dow futures up nearly 0.1 per cent at 31,116.5.

Japan's benchmark Nikkei 225 rose 0.8 per cent to finish at 28,756.86, while South Korea's Kospi edged up 1.5 per cent to 3,160.84. Hong Kong's Hang Seng slipped 0.1 per cent to 29,927.76, while the Shanghai Composite added 1.1 per cent to 3,621.26.

Data released by the Japanese Finance Ministry showed the world's third largest economy may be crawling toward a recovery, as exports for December rose for the first time in two years, by 2 per cent from the same month the previous year. Imports declined 11.6 per cent, marking the 20th straight month of declines.

Japan's economy, like many others across the region, has been slammed by the coronavirus pandemic, which has crushed tourism and dampened economic activity and trade.

The Bank of Japan kept its easy monetary policy at its policy board meeting, as expected. Tokyo and other urban areas of Japan are under a state of emergency, as coronavirus cases have surged lately.

Biden took a flurry of executive actions in his first hours as president. He also pitched a plan to pump $1.9 trillion more into the struggling economy, hoping to act quickly as his Democratic party now controls the White House and both houses of Congress.

The hope on Wall Street is that such stimulus will help carry the economy until later this year, when more widespread COVID-19 vaccinations get daily life closer to normal.

“Most of Wall Street is assuming that the second half (of 2021) is when we will see pent-up demand start to show up in the economy, and that will push economic indicators higher and will likely cause a ramp up in earnings projections," said Sam Stovall, chief investment strategist at CFRA.

Gains for stocks have been accelerating since Biden's election on enthusiasm about COVID-19 vaccines and potential economic moves. The bump for stocks between Election Day and Biden's inauguration was bigger than Trump's bump between his election and inauguration.

Analysts have been expressing concerns about pricey stock values heading into the latest round of corporate earnings, but they look more reasonable amid the backdrop of historically low interest rates, said Solita Marcelli, chief investment officer, Americas, at UBS Global Wealth Management. The low rates, along with new stimulus and the continued rollout of vaccines, will likely help bolster markets and the recovery.

“We think that global growth is going to continue to pick up,” she said.

In energy trading, benchmark US crude gained 26 cents to $53.24 a barrel. Brent crude, the international standard, fell 37 cents to $55.71 a barrel.

In currency trading, the US dollar slipped to 103.54 Japanese yen from 103.76 yen. The euro cost $1.2119, down from $1.2134.