World Shares Mostly Higher on Monday 01/19 06:47
World markets were mostly higher Tuesday as the coming changing of the guard
in the U.S. raised hopes for more support for the economy and more aggressive
measures to fight the pandemic.
(AP) -- World markets were mostly higher Tuesday as the coming changing of
the guard in the U.S. raised hopes for more support for the economy and more
aggressive measures to fight the pandemic.
Benchmarks were higher in Paris, London, Tokyo and Hong Kong but slipped in
Shanghai. World markets were subdued on Monday, with U.S. exchanges closed for
Analysts say attention is focused on Wednesday's inauguration of Joe Biden
Signaling determination to move swiftly, Biden's nominee for treasury
secretary, former Federal Reserve chair Janet Yellen, is urging Congress to do
more to fight the recession to avoid an even worse downturn.
In testimony prepared for her confirmation hearing Tuesday before the Senate
Finance Committee, Yellen said more aid is needed to get coronavirus vaccines
distributed --- key to ending outbreaks --- to reopen schools and to help
families struggling with job losses stay fed and housed.
"The positive shift in investor optimism ahead of inauguration day is a
clear signal the market is leaning towards an early stamp of approval on the
Biden administration policy agenda," Stephen Innes of Axi said in a commentary.
Germany's DAX gained 0.4% to 13,902.79 and the CAC 40 in Paris rose 0.3% to
5,634.29. Britain's FTSE edged 0.2% higher, to 6,734.19. U.S. futures also
augured gains, with the contract for the S&P 500 up 0.7% and that for the Dow
industrials trading 0.5% higher.
Worries over possible unrest or other security threats following the attack
on the Congress earlier this month seem to have abated somewhat as investors
study the implications for markets of further stimulus.
"The concerns over the Presidential inauguration tomorrow, which weighed on
sentiments yesterday, have receded with fiscal stimulus business as usual
regaining ascendancy," Jeffrey Halley of Oanda said in a report.
Last week, Biden proposed a $1.9 trillion relief plan to provide more aid to
American families, businesses and local communities and more support for
vaccine production and distribution.
While Democrats have endorsed the effort, many Republican lawmakers have
expressed concerns about the price tag given soaring federal budget deficits.
Yellen said that she and Biden were aware of the country's rising debt
burden, but that ultra-low interest rates make spending more now a smart choice.
The Senate Finance Committee hearing with Yellen on Tuesday is one of
several that the Senate will be holding as the incoming Biden administration
tries to get its top Cabinet officials in office quickly.
Adding to the sense of urgency, coronavirus outbreaks have been gaining even
as states work to get COVID-19 vaccines into the arms of as many people as
Coronavirus deaths are rising in nearly two-thirds of American states as a
winter surge pushes the overall toll toward 400,000 amid warnings that a new,
highly contagious variant is taking hold.
During Asian trading, Hong Kong's Hang Seng gained surged 2.7% to 29,642.28
and the Nikkei 225 in Tokyo gained 1.4% to 28,633.46. South Korea's Kospi
jumped 2.6% to 3,092.66. In Australia, the S&P/ASX 500 rose 1.2% to 6,742.60.
The Shanghai Composite index slipped 0.8% to 3,566.38. India's Sensex jumped
1.6% and shares rose in most other markets aside from Malaysia and Indonesia.
On Monday, trading got off to a slow start for the week with U.S. markets
closed and the reaction to news that the Chinese economy grew 2.3% in 2020
after a sharp contraction early in the year was subdued.
Treasury yields have been climbing on expectations the U.S. government will
borrow much more to pay for the additional stimulus proposed by President-elect
Joe Biden, in addition to improved economic growth and higher inflation. The
yield on the 10-year Treasury zoomed above 1% last week for the first time
since last spring earlier this month and briefly topped 1.18% last week. The
yield on the 10-year Treasury was 1.11% on Tuesday.
In other trading, benchmark U.S crude oil reversed losses, gaining 21 cents
to $52.63 per barrel in electronic trading on the New York Mercantile Exchange.
It gave up $1.20 to $52.42 per barrel on Monday.
Brent crude, the international standard, picked up 54 cents to $55.29 per
The dollar rose to 103.99 Japanese yen from 103.69 yen late Monday. The euro
strengthened to $1.2115 from $1.2078.