Equities move higher on US infrastructure

US infrastructure agreement lifts Asian equities

The bipartisan US infrastructure agreement announced overnight lifted Wall Street, particularly growth stocks, flowing over into Asian markets today. Overnight, the S&P finished 0.58% higher, with the Nasdaq rising 0.69% and the Dow Jones outperforming, climbing 0.98%. The rally was fairly broad-based, with big-tech having a good day at the office, although markets were more focused on US infrastructure winners. Arguably, a massive investment in broadband would obviously benefit big-tech, so the package had something for everyone.

US index futures have continued their move higher today in Asia, with the S&P minis and Nasdaq futures slightly higher, but the shovel-heavy Dow futures jumping by 0.40%. That has green-lighted a broad rally in Asia, with the Nikkei 225 rising 0.75% and the Kospi climbing 0.70%. Mainland China’s Shanghai Composite has risen 0.45%, with the CSI 300 0.55% higher and the Hang Seng rallying by 1.0%.

Singapore is 0.30% higher, while Kuala Lumpur has climbed by 0.40%, and Taipei has risen by 1.0%, and Jakarta has shaken off a rapidly deteriorating Covid-19 situation to post a 0.50% gain. Both Australia and New Zealand remain on delta-variant Covid-19 tenterhooks today, with parts of wider Sydney also entering firmer lockdowns. That has not dented sentiment, though, with the ASX 200 rising 0.60%, the All Ordinaries by 0.50%, while Wellington has gained 0.30%.

It seems that where the US goes, so goes the world, particularly when Wall Street rises. That is certainly the case in Asia, where the US has given APAC 1.2 trillion reasons to be cheerful on the commodity, machinery and electronics exports front. Positive German data yesterday lifted Europe, and Europe and UK equities should get another infrastructure tailwind this afternoon. A higher US Core PCE Price Index tonight could introduce some inflation gremlins for Wall Street, but it would take a severe upside surprise and some Fed-speak to upset a positive finish to the week.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

Latest posts by Jeffrey Halley (see all)