BANGKOK (AP) — Asian shares started the week off with a rally, as Japan’s Nikkei 225 index briefly topped 30,000 for the first time since August 1990.
As of midday the Nikkei had fallen back below that level but was still up 1.3%, at 29,914.02. Shares also rose in India, South Korea and Australia. Markets in Shanghai and Hong Kong were closed for the Lunar New Year.
The strong buying in Tokyo was driven by news that the Japanese economy grew at a nearly 13% annual pace in the last quarter, and by strong corporate earnings reports. It was the second straight quarter of growth after a downturn drastically worsened by the impact of the pandemic.
The recovery should put the economy on track to recover to pre-pandemic levels by next year, helped by a recovery in demand for exports in the U.S. and other major trading partners, Marcel Thieliant of Capital Economies said in a report.
Japan recently re-imposed a state of emergency in Tokyo and several other prefectures to battle a resurgence of outbreaks. But sustained corporate investment and government spending will help offset the impact on travel, restaurants and other sectors most affected, he said.
“And while most economists expect a renewed contraction this quarter due to the second state of emergency, we think that output will be broadly flat in Q1 and rise more strongly this year than almost anyone anticipates," he said.
Other Asian markets also saw strong gains. The Kospi in Seoul rose 1.5% to 3,146.29 and India's Sensex climbed 0.7% to 51,907.75. In Australia, the S&P/ASX 200 rose 0.9% to 6,869.20. U.S. futures also were higher.
On Friday, technology companies led a late-afternoon rally on Wall Street that capped a week of wobbly trading. with the major stock indexes hitting all-time highs.
The S&P 500 rose 0.5% to 3,934.83, a record high for the second day in a row. It was its second straight weekly gain.
The tech-heavy Nasdaq composite picked up 0.5%, to 14,095.47, also a record. The Dow Jones Industrial Average likewise set a new high, edging 0.1% higher to 31,458.40.
Traders also bid up shares in smaller companies. The Russell 2000 index rose 0.2%, to 2,289.36.
Optimism that Washington will come through on trillions of dollars of more aid for the economy and encouraging company earnings reports have helped stocks grind higher this month, along with hopes that the coronavirus vaccine rollout will set the stage for stronger economic growth in the second half of this year.
Democrats have decided to use a legislative process that does not require Republican support to pass the $1.9 trillion package proposed by President Joe Biden.
A majority of companies have now reported their latest round of earnings and the results have been surprisingly good. Roughly 75% of companies in the S&P 500 have released results, showing overall growth of 2.8%, according to FactSet. That’s a sharp reversal from the 13% contraction analysts had forecast in late September.
In other trading:
The yield on the 10-year Treasury rose to 1.21% from 1.20% late Friday.
U.S. benchmark crude oil picked up $1.27 to $60.74 per barrel in electronic trading on the New York Mercantile Exchange. It advanced $1.23 to $59.47 per barrel on Friday. Brent crude, the international standard, gained $1.08 to $63.51 per barrel.
The U.S. dollar rose to 105.04 Japanese yen from 104.99 yen late Friday. The euro strengthened to $1.2136 from $1.2123.