BANGKOK (AP) — Shares advanced in Asia on Monday after a strong finish last week on Wall Street.
Tokyo, Hong Kong, Seoul and Shanghai all started out with modest gains and U.S. futures also edged higher. Oil prices slipped.
Stocks climbed Friday in New York, though the S&P 500 still ended with its first weekly loss in the last five. Technology stocks and banks led much of the gains, while investors focused on lackluster company earnings from big names like Intel, American Express and Honeywell.
So far, Asian markets have taken in stride recent setbacks in vanquishing the pandemic as infections have come roaring back in Japan, Thailand and India, among other countries.
Government precautions to battle surging outbreaks point to an uneven global recovery, economists say. That’s especially true for tourism, an important industry for many parts of the region.
“One thing is for sure, markets have priced in the pandemic as a sprint and not a marathon. That premise could come under stress in the weeks to come, although I sorely hope I am completely wrong on this front,” Jeffrey Halley of Oanda said in a commentary.
“Pandemic nerves are likely to be drowned out this week as it progresses as the pace of the data calendar picks up,” he said.
Tokyo’s Nikkei 225 added 0.5% to 29,120.12 and the Hang Seng in Hong Kong edged less than 0.1% higher to 29,151.05. In Seoul, the Kospi jumped 0.7% to 3,208.08. The Shanghai Composite index rose 0.1% to 3,476.20, while Australia’s S&P/ASX 200 slipped 0.1% to 7,055.30. Shares fell in Jakarta but rose in Taiwan and Singapore.
India’s Sensex climbed 1.3% to 48,515.11, even as authorities reported newly confirmed coronavirus cases hit a daily high, topping 350,000.
On Friday, the benchmark S&P 500 rose 1.1% to 4,180.17. The Dow Jones Industrial Average rose 0.7% to 34,043.49. The tech-heavy Nasdaq climbed 1.4% to 14,016.81, while the Russell 2000 index of small caps rose 1.8% to 2,271.86.
Shares in Kimberly-Clark, the maker of Huggies diapers and other consumer products, fell by the most since last October after the company reported disappointing results.
Corporate earnings have been mostly positive, but investors are weighing economic growth against threats from the pandemic and worries about changes in tax policy.
Banks made solid gains as bond yields ticked higher. That allows them to charge more lucrative interest on loans. The yield on the 10-year Treasury rose to 1.57% from 1.56% late Friday.
Wall Street has been in rally mode in recent weeks as the rollout of COVID-19 vaccinations, the massive support from the U.S. government and Federal Reserve, and a string of encouraging economic data fuel expectations for a stronger economy and solid corporate profit growth this year.
About a quarter of S&P 500 companies have reported quarterly results so far this earnings season. Of these, 84% have delivered earnings that topped Wall Street’s estimates, according to FactSet.
This week is another busy one for earnings, with 181 S&P 500 companies, including Tesla, Starbucks, Microsoft and Amazon.com, set to report results.
Investors are also weighing the implications of President Joe Biden’s plans to introduce higher capital gains taxes to help pay for the increased government spending to help the economy recover from the pandemic. Bloomberg News reported the pending proposal Thursday afternoon, citing unidentified sources.
Higher taxes on capital gains would make stocks marginally more expensive in the long term, which might impact the market’s overall valuation. Despite millions of Americans having their retirement funds in the stock and bond markets, most stocks are owned by the rich.
Meanwhile, the price of Bitcoin jumped 5.1% to $52,422.18. It dropped about 2% to $50,675 Friday, according to the tracking site CoinDesk. The cryptocurrency had traded for as much as $63,000 as recently as last week.
In other trading, U.S. benchmark crude oil lost 21 cents to $61.93 per barrel in electronic trading on the New York Mercantile Exchange. It picked up 71 cents to $62.14 per barrel on Friday. Brent crude, the international standard, dropped 99 cents to $65.12 per barrel.
The U.S. dollar slipped to 107.71 Japanese yen from 107.93 yen. The euro rose to $1.2113 from $1.2094.
