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Asian Markets Mixed After Biden Unveils Stimulus Plan

asiancommentary jan18 14jan21 lt

Asian stock markets are mixed on Friday after U.S. President-elect Joe Biden revealed details of a $1.9 trillion stimulus proposal, called the American Rescue Plan, to support American households and businesses amid the pandemic.

Worries about rising U.S.-China tensions weighed on the markets after the Trump administration placed Chinese smartphone maker Xiaomi on a blacklist of companies with alleged ties to the Chinese military.

The Australian market is extending gains from the previous session.

The benchmark S&P/ASX 200 Index is adding 11.70 points or 0.17 percent to 6,727.00, after touching a high of 6,744.00. The broader All Ordinaries Index is up 11.30 points or 0.16 percent to 6,994.00. Australian shares closed higher on Thursday ahead of U.S. stimulus unveiling.

Among the major miners, BHP Group is rising more than 2 percent and Rio Tinto is adding almost 1 percent, while Fortescue Metals is down 0.3 percent.

Oil stocks are higher crude oil prices rebounded overnight. Woodside Petroleum is advancing more than 2 percent, Oil Search is adding 0.6 percent and Santos is up 0.1 percent.

In the banking sector, Westpac is rising almost 2 percent, National Australia Bank is advancing more than 1 percent and ANZ Banking is adding 0.4 percent, while Commonwealth Bank is declining 0.4 percent.

Meanwhile, gold miners are weak after gold prices dipped overnight. Evolution Mining is losing more than 1 percent and Newcrest Mining is lower by almost 1 percent.

Tech stocks are also mostly lower after strong gains in the previous session. WiseTech Global is declining almost 1 percent and Appen is down 0.7 percent, while Afterpay is gaining almost 6 percent.

Objective Corp. forecast a 70 percent surge in its profit for the first half of the year on 40 percent growth in sales. The software vendor's shares are rising more than 5 percent.

On the economic front, the Australian Bureau of Statistics said that the total value of overall home loans in Australia was up a seasonally adjusted 5.6 percent on month in November, coming in at A$23.96 billion.

The Japanese market opened higher following news that U.S. President-elect Joe Biden unveiled a $1.9 trillion coronavirus relief package. However, the market slipped into negative territory as investors booked profits after strong gains in recent sessions.

The benchmark Nikkei 225 Index is down 75.08 points or 0.26 percent to 28,623.18, after touching a high of 28,820.50 in early trades. The Japanese market closed higher for a fifth day on Thursday.

Market heavyweight SoftBank Group is adding 0.4 percent, while Fast Retailing is declining more than 2 percent. In the tech space, Advantest is gaining more than 4 percent and Tokyo Electron is higher by almost 4 percent.

The major exporters are mostly lower on a stronger yen. Mitsubishi Electric, Sony and Panasonic are declining more than 1 percent each, while Canon is gaining more than 7 percent.

In the banking sector, Mitsubishi UFJ Financial is adding 0.7 percent and Sumitomo Mitsui Financial is up 0.3 percent. Among automakers, Honda is losing more than 2 percent and Toyota is lower by more than 1 percent.

Among the other major gainers, Screen Holdings is gaining more than 6 percent, while Oki Electric Industry and Seiko Epson are rising more than 4 percent each.

Conversely, Hino Motors is losing almost 4 percent, while Mitsubishi Heavy Industries, Isuzu Motors, Denso Corp. and Nexon Co. are lower by more than 3 percent each.

In economic news, Japan will provide November figures for its tertiary industry index today.

In the currency market, the U.S. dollar is trading in the upper 103 yen-range on Friday.

Elsewhere in Asia, Shanghai, Singapore, Hong Kong and Taiwan are also higher. South Korea and New Zealand are notably lower, while Indonesia and Malaysia are edging lower.

On Wall Street, stocks saw modest strength for most of the trading session on Thursday amid optimism about additional fiscal stimulus. However, stocks gave back ground going into the close of trading, coinciding with an advance by treasury yields, after Federal Reserve Chair Jerome Powell suggested that the economy could return to pre-pandemic levels sooner than expected due to unprecedented fiscal stimulus and the Fed's aggressive intervention.

The Dow slipped 68.95 points or 0.2 percent to 30,991.52, the Nasdaq edged down 16.31 points or 0.1 percent to 13,112.64 and the S&P 500 fell 14.30 points or 0.4 percent to 3,795.54.

The major European markets also moved to the upside on Thursday. While the U.K.'s FTSE 100 Index advanced by 0.8 percent, the German DAX Index and the French CAC 40 Index climbed by 0.4 percent and 0.3 percent, respectively.

Crude oil prices rebounded from early losses to end notably higher on Thursday on hopes big stimulus from the Biden administration and the Covid vaccination drive will help lift energy demand. WTI crude for February ended up by $0.66 or about 1.3 percent at $53.57 a barrel, the highest settlement since mid-February 2020.

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