Shares advanced Tuesday in Asia after hopes for fresh economic stimulus helped Wall Street recover its losses from the initial shock of learning President Donald Trump had tested positive for the coronavirus.
Trump left the hospital after spending less than three days there, returning to the White House late Monday despite uncertainty over his recovery and risks that he is still infectious.
Shares rose in Tokyo, Hong Kong and Seoul. Markets in mainland China are closed for a weeklong holiday.
Overnight, the S&P 500 climbed 1.8%. Treasury yields and oil all rose after Trump and House Speaker Nancy Pelosi both noted the importance over the weekend of additional support for the economy.
Australia’s S&P/ASX 200 rose 0.4% to 5,962.10 after the central bank kept its policies basically unchanged. Later Tuesday, the treasurer was set to reveal a big spending financial blueprint for the next few years that will drive business investment and job creation while repairing pandemic damage to the economy.
The annual budget is expected to contain a wage subsidy designed to get unemployed young Australians back to work. The government also hopes to bring forward planned income tax cuts.
Treasurer Josh Frydenberg will also reveal record debt is expected to accrue in the current fiscal year through next June.
Japan’s Nikkei 225 climbed 0.5% to 23,433.73 and the Hang Seng in Hong Kong jumped 0.8% to 23,953.82. South Korea’s Kospi added 0.3% to 2,364.11.
India’s Sensex surged 0.8% to 39,294.51. Shares also rose in Taiwan and Southeast Asia.
“Asian markets are quiet with mainland China away and caution around potential negative headlines from the White House,” Jeffrey Halley of Oanda said in a commentary.
Overnight, the S&P 500 jumped 60.19 points to 3,408.63, with nine out of 10 stocks in the index rising. Energy producers and tech companies led the way.
The market’s rally accelerated after Trump tweeted in the afternoon that he planned to leave the hospital, though his medical team said he “may not entirely be out of the woods yet.”
The Dow Jones Industrial Average rose 1.7% to 28,148.64 and the Nasdaq composite climbed 2.3% to 11,332.49. Smaller stocks rose even more in an indication of improved market optimism, with the Russell 2000 index advanced 2.8%, to 1,581.96.
The markets fell after Trump’s positive COVID test was reported Friday, tumbling on concerns that a White House victory for Democrat Joe Biden would mean higher taxes and tighter regulations for companies, which could drag down their profits. But analysts said a Democratic sweep of the election could also raise the probability of a big government support plan for the economy, something that investors have been clamoring for since jobless benefits and other stimulus Congress approved in March expired.
Pelosi told airline executives on Friday to stop the furloughs of tens of thousands of workers because aid for the industry was “imminent,” either as a stand-alone effort or as part of a wider rescue package. A stand-alone bill for airlines failed to advance in the House on Friday, but hopes remain for a larger effort.
“Expectations are undeniably rising that compromise will be reached. With the FOMO (fear of missing out) gnomes of Wall Street piling into everything, I dread to the see the correction if they don’t though,” Halley of Oanda said.
The yield on the 10-year Treasury rose to 0.77% from 0.76% late Monday.
U.S. benchmark crude oil picked up 11 cents to $39.33 per barrel in electronic trading on the New York Mercantile Exchange. It surged $2.17 on Monday to $39.22 per barrel. Brent crude, the international standard, gained 13 cents to $41.42 per barrel.
In currency dealings, the U.S. dollar weakened to 105.67 Japanese yen from 105.73 yen. The euro rose to $1.1788 from $1.1786.
AP Business writers Stan Choe and Damian J. Troise contributed.