Asian markets opened higher on Tuesday as Joe Biden’s presidential inauguration approaches, and they are continuing to bloom after yesterday's quarterly reports of China’s economic growth.
Biden has pledged to do more to fight the pandemic and help the economy. Last week, he proposed an aid plan of $1.9 trillion to help American businesses and families, as well as to fight the pandemic through widespread vaccination. Also, Janet Yellen, Biden’s nominee for treasury secretary is calling on Congress to fight the coronavirus-induced recession. The assumption is that she should be able to easily win approval for her measures in the Democratic-controlled Senate.
Investor optimism before the presidential inauguration seems to show that the market is in early approval of Biden and his proposed agenda. Now the focus is on tomorrow’s inauguration and the changes in the U.S. administration.
Besides optimism surrounding Biden’s upcoming presidency, China’s economic growth in 2020 also brought financial strength and an influx of cash to Asian markets, which got a boost from China’s expansion. It was reported yesterday that China’s GDP rose 2.3% in 2020, even when global economies were battling during the pandemic. This announcement caused Asian markets to bloom yesterday morning and some have continued today.
Asian Markets Welcome the News
Asian shares received a boost from China’s growth and optimism regarding Biden’s policies. Yesterday, Chinese tech giant Xiaomi (1810.HK) rose 4.8%. China Mobile (0941.HK) also went up 1.7% on Monday, rising back from its fall after the imposition of U.S. sanctions. Tencent (0700.HK) has also grown 15% since the beginning of 2021 and closed Monday with a record high.
In addition, Hong Kong’s stocks are at their highest since May 2019 with the Hong Kong 50 (HSI) index rising 2.4% yesterday, and the Hong Kong Dollar that pushed up as a result as well.
Other Asian indices saw mixed effects. Yesterday, the Nikkei 225 (Japan 225) in Tokyo also rose 1%, while the China A50 (CN) index went down 1%. The Singapore 25 (SGP) remained unchanged in Monday’s trading
With China’s positive growth report yesterday and hopes Biden will strengthen the economy, it remains to be seen if Asian markets will continue this uptrend and if so, for how long.