The Nikkei 225 rose to 1991 levels on news that Joe Biden had won the US Presidential election. This was the first day of trading since the news of the Biden win, and impacted all Asia stock markets in varying degrees.
The Nikkei 225 is the principal Japanese share index and rose by 2.5% in a day’s trading that has seen Japanese shares hit an almost 30-year high.
Asia Rises On Biden And Vaccine Updates
Shares rose right across Asia with positive news from China, Hong Kong and Australia. Even the 15% drop in Japan Airlines’ price failed to impact on what’s been termed the “Biden Bounce“.
How will the new US president impact on US trade relations?
It’s hoped that the new White House administration will use fiscal stimuli to open up US markets and also help reduce the spread of coronavirus.
What’s more, Chinese markets viewed the new administration as being positive for US-China trade and technology policies.
Larry Hu from Macquarie bank said:
“The political uncertainty has largely gone as the election is over. The market is taking the Biden win as a positive, as he is not very likely to fight a new trade war with China. The chance for a new tech war is also drifting lower.”
In all the Shanghai Composite rose nearly 2% on Monday trading on hopes that trade relationships between the two superpowers will be improved and they can move forward from the tariff wars that have dogged their economies since 2018.
Bruce Pang from China Renaissance based in Hong Kong said:
“We think the Chinese authorities might be betting on a less confrontational but more predictable Biden administration that they can work with.”
Much of Japan’s gains were in part down to the car making sector which has seen strong earnings in recent months.
Chris Weston from Pepperstone brokers commented:
“The Nikkei 225 is breaking out and is a poster child of strength and momentum.”
Even the news that Japan Airlines is raising capital to deal with its Covid-19 worries failed to burst the optimism felt by traders at the election of a new President with a greater commitment to international trade.