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Asian equities rally after Wall Street record

By AFP - Apr 04,2021 - Last updated at Apr 04,2021

Wall St sign hangs at the New York Stock Exchange at Wall Street on March 23, in New York City (AFP photo)

HONG KONG — Tokyo's Nikkei led a rally in holiday-thinned trade in Asia on Friday following a record-breaking day on Wall Street with investors buoyed by Joe Biden's huge new infrastructure spending plan and growing optimism over the economic recovery.

With most equity and commodity markets in the region closed for Easter, business was light but the mood remained decidedly upbeat ahead of the release of key US jobs data that is expected to confirm that the world's top economy is getting back on its feet.

Confidence that global growth will soar as vaccines allow economies to open has for now overtaken worries that the rebound will fan inflation and force central banks to wind back their market-boosting monetary policies.

"Before you worry about inflation, there's reflation and I think that's the main theme in the market," Ed Campbell, at QMA, said.

Biden's $2.25 trillion rebuilding package — coming soon after the passage of his $1.9 trillion stimulus — has reinforced the view among investors that the US economy will run hot, with analysts saying its corporate tax implications were also being put aside for now.

With this in mind, and after a strong read on US March manufacturing, the S&P 500 broke the 4,000-point barrier for the first time, while the Nasdaq and Dow also enjoyed healthy gains.

The few markets in Asia that were open followed suit, with Tokyo up 1.6 per cent, Seoul almost 1 per cent higher and Shanghai also in positive territory along with Bangkok.

"The US equity market opened in the second quarter with a sonic boom ushering in a great Good Friday," said Axi Strategist Stephen Innes.

He added that equities likely had further to run higher as vaccines are administered around the world, and despite a pick-up in infections in parts of the world including France, which is facing another lockdown.

"Vaccine rollouts remain the game's name and drive the narrative, even with the EU lagging, as investors view this delay in the context that the catch-up is but a function of time," he said. 

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