New York (AFP) – Japanese stocks surged to a record high Monday as investors cheered Prime Minister Sanae Takaichi’s victory in a snap parliamentary election. Events in Japan helped boost sentiment across Asia, while markets in Europe and New York also finished higher despite experiencing periods of weakness. The Dow nudged to a second straight record after topping 50,000 points for the first time on Friday.
Takaichi’s resounding victory saw her Liberal Democratic Party take around a two-thirds majority of the lower house, paving the way for increased fiscal stimulus and massive tax cuts. Financial markets may be nervous about Japan’s public finances and its gargantuan debt pile if Takaichi decides to cut taxes and boost spending. But for now, investors are upbeat, pushing the benchmark Nikkei 225 above 57,000 points for the first time, and the yen also advanced.
“A big victory was expected but this is probably even more impressive,” said Jim Reid, managing director at Deutsche Bank. “The ‘supermajority’ has raised the prospects of even more aggressive policy, including fiscal plans,” he added.
Hong Kong and Shanghai stock markets also closed higher, and Seoul climbed more than four percent, helped by a six-percent jump in Samsung shares after a report said it would start mass production of its next-generation HBM4 memory chips. Bangkok added more than three percent after a stunning election victory for caretaker Prime Minister Anutin Charnvirakul’s conservative Bhumjaithai Party that boosted hopes for political stability.
In Europe, UK bond yields pushed higher as British Prime Minister Keir Starmer scrambled to shore up his premiership Monday, preparing to face lawmakers furious that his Labour government has become embroiled in the Jeffrey Epstein scandal. “A political risk premium is once again being built up in UK asset prices, as the market fears what a new leader could bring to the table in terms of economic policy,” said Kathleen Brooks, research director at trading group XTB.
Starmer insisted Monday he would not “walk away” after Scottish Labour leader Anas Sarwar called for him to resign for appointing Peter Mandelson as US ambassador despite knowing he had maintained links to Epstein. Analysts said caution still dominates with regards to the tech sector, which has been hit by worries over the vast sums being invested in AI and doubts about when they will produce returns.
Economic data coming this week includes US retail sales, jobs, and inflation figures. In other company news, shares in Novo Nordisk rallied 5.3 percent in Copenhagen as it filed suit against Hims & Hers seeking to block the sale of “knock off” versions of weight loss drugs Wegovy and Ozempic at lower prices. Hims & Hers sank 16 percent.
– Key figures at around 2115 GMT –
New York – Dow: UP less than 0.1 percent at 50,135.87 (close)
New York – S&P 500: UP 0.5 percent at 6,964.82 (close)
New York – Nasdaq Composite: UP 0.9 percent at 23,238.67 (close)
London – FTSE 100: UP 0.2 percent at 10,386.23 (close)
Paris – CAC 40: UP 0.6 percent at 8,323.28 (close)
Frankfurt – DAX: UP 1.2 percent at 25,014.87 (close)
Tokyo – Nikkei 225: UP 3.9 percent at 56,363.94 (close)
Hong Kong – Hang Seng Index: UP 1.8 percent at 27,027.16 (close)
Shanghai – Composite: UP 1.4 percent at 4,123.09 (close)
Dollar/yen: DOWN at 155.90 yen from 157.22 yen on Friday
Euro/dollar: UP at $1.1918 from $1.1815
Pound/dollar: UP at $1.3695 from $1.3611
Euro/pound: UP at 86.99 pence from 86.81 pence
Brent North Sea Crude: UP 1.5 percent at $69.04 per barrel
West Texas Intermediate: UP 1.3 percent at $64.36 per barrel
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© 2024 AFP
