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HONG KONG, Jan 21 — Asian markets welcomed Joe Biden’s first day as US president with broad gains today as investors look forward with optimism about his economic and Covid recovery plans.
Soon after being sworn in Biden signed more than a dozen executive orders unwinding some of his predecessor’s policies, including rejoining the World Health Organisation that observers say will help in the fight against the devastating disease.
He also signed back up to the Paris climate accord, extended a mortgage foreclosure moratorium and a pause on student debt repayments.
The moves came as the new administration looks to push through a US$1.9 trillion relief package for the world’s top economy that encompasses, among other things, US$1,400 cash payments to struggling Americans.
Investors have welcomed Biden’s election and his pledges to kickstart growth, which has offset concerns about his plans for higher taxes and market regulation.
In his inauguration address, Biden pledged to “rebuild the economy” and “rebuild the backbone of the country: the middle class”.
His pick for Treasury secretary, Janet Yellen, provided a jab in the arm for markets on Tuesday by reasserting her determination to drive through the stimulus package, telling lawmakers to “go big” if they wanted to rescue the economy.
There is also a hope that he will devote more time to fighting the coronavirus, which has killed more than 400,000 people in the United States and two million worldwide.
All three main indexes on Wall Street surged to record highs, and Asian investors took up the baton with relish.
Hong Kong rose for a sixth successive day to breach 30,000 points for the first time since April 2019.
Tokyo, Shanghai, Sydney, Seoul, Singapore, Taipei, Jakarta and Wellington also rose, though there were dips in Manila and Bangkok.
“Stock markets continue to reflate post-inauguration with the consensus view now that... Biden’s early focus will be more on growth than tax hikes,” said Axi strategist Stephen Innes.
“The market is also seeing through longer lockdowns on the premise that Covid vaccinations will lead us out of the pandemic quickly.”
The hope for Biden’s recovery plans has helped overshadow worries about surging virus cases and the spread of a more infectious strain that has caused headaches for governments as they battle to give jabs to their populations.
Biden has promised to get 100 million people inoculated within his first 100 days and analysts said pharma giant Johnson & Johnson’s new one-shot vaccine, which is also easy to transport, would be crucial in achieving that though it has still to be authorised.
“If stimulus happens at the same time that people get vaccinated, the optimism can’t help but build,” said Keith Buchanan, at GLOBALT Investments in Atlanta.
“It’s a fairly safe bet there will be another stimulus package with more direct payments to consumers and individuals and more help for small businesses.” — AFP