TOKYO- Asian shares advanced on Thursday as markets’ euphoric mood over COVID-19 vaccines and the prospects of more political predictability and economic stimulus under the incoming Biden administration overrode a slate of weak US economic data.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent while Japan’s Nikkei gained 0.6 percent.
US S&P 500 future rose 0.2 percent in Thursday’s Asian trade while Nasdaq futures rallied 0.4 percent.
MSCI’s broadest gauge of the world’s shares covering 49 markets added 0.1 percent to bring its gains so far this month to 12.7 percent, on course to make its biggest monthly gain on record.
The rally started after Democrat Joe Biden’s US election victory earlier this month raised hopes for more government spending to support the pandemic-hit economy and for more policy predictability after four years of Donald Trump’s presidency.
“Reduced policy uncertainties are helping markets. It will be easier for companies to make capital expenditures,” said Arihiro Nagata, general manager of global investment at Sumitomo Mitsui Bank.
“It’s true that stock prices are quite expensive but markets are finding fewer and fewer reasons to sell them. In this environment, you can’t make profits by selling. The only question to ask is what assets you should buy.”
On Wall Street on Wednesday, the S&P 500 index shed 0.16 percent and the Dow Jones Industrial Average 0.58 percent, though the tech-heavy Nasdaq Composite increased 0.47 percent.
Traders attributed falls in S&P 500 and the Dow Jones to weak US economic data.
Figures from the US Labor Department’s weekly jobless claims suggested that an explosion in new COVID-19 infections and business restrictions were boosting layoffs and undermining the labor market recovery.
“I think a lot of people got ahead of themselves imagining that the recovery was taking shape. To me the recovery isn’t taking shape until we have a viable vaccine,” said Justin Lederer, Treasury analyst and trader at Cantor Fitzgerald.
But investors also noted markets will remain awash with cash to invest, with the world’s central banks ready to provide more support for the pandemic-stricken economy.