Asia shares rise on supportive Fed as Biden unveils new stimulus

HONG KONG: Asian shares rose in early trade on Thursday after the U.S. Federal Reserve said it was too early to consider rolling back emergency support for the economy, and as U.S. President Joe Biden unveiled plans for a $1.8 trillion stimulus package.

Fed Chair Jerome Powell said on Wednesday that “it is not time yet” to begin discussing any change in policy after the U.S. central bank left interest rates and its bond-buying programme unchanged, despite taking a more optimistic view of the country’s economic recovery.

Powell’s comments came before Biden’s unveiling of a sweeping package for families and education in his first speech to Congress.

Excerpts of Biden’s speech released in advance by the White House “hit the high points – big infra(structure) spend, talking climate action and vaccines,” said John Milroy, investment adviser at Ord Minnett. “The Fed remains dovish, all very supportive.”

Early in the Asian trading day, MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.1%.

Australia’s S&P/ASX 200 edged up 0.31%, as strong oil prices lifted energy stocks.

China’s blue-chip CSI300 index was 0.65% higher in early trade. Hong Kong’s Hang Seng index opened up 0.7%, Seoul’s KOSPI added 0.37% and Taiwan shares rose 0.48%.

Markets in Japan were closed for a holiday but Nikkei futures edged 0.05% higher to 28,970.

Tech shares got a boost after Apple Inc on Wednesday posted sales and profits ahead of Wall Street expectations, though it warned a global chip shortage could dent iPad and Mac sales by several billion dollars.

Nasdaq futures were 0.79% higher and S&P e-mini futures added 0.48% after Wall Street ended lower on Wednesday. The Dow Jones Industrial Average fell 0.48% to end at 33,820.38 points, while the S&P 500 lost 0.08% to 4,183.18.

The dollar dropped 0.15% against the yen to 108.43 and the euro gained 0.2% to 1.2147 following the Fed’s decision to maintain supportive policies.

Oil prices extended gains on Thursday after rising 1% in the previous session as bullish forecasts for a demand recovery this summer offset concerns of rising COVID-19 cases in India, Japan and Brazil.

Brent crude for June rose 0.37%, to $67.52 a barrel while U.S. West Texas Intermediate crude for June was at $64.12 a barrel, up 0.41%.

Spot gold added 0.42% to $1,788.72 an ounce.