Asian stocks rise amid economic optimism and US infrastructure deal

Shares climb higher in Japan, South Korea and Australia

Shares climbed in Japan, South Korea and Australia as global economies continued to recover from the coronavirus pandemic. EPA/KIMIMASA MAYAMA

Asian stocks opened in the green Friday after US shares hit a record on a bipartisan $579 billion US infrastructure deal that stoked economic optimism. The dollar held a retreat.

Shares climbed in Japan, South Korea and Australia, and Hong Kong futures pointed higher. US contracts were little changed after the S&P 500 and Nasdaq 100 reached new peaks. Sectors seen as beneficiaries of the recovery from the pandemic, such as energy, led gains. US banks rose in postmarket trading after clearing stress tests.

President Joe Biden celebrated the bipartisan plan, which is expected to move through Congress alongside a separate bill that would spend trillions more on what he called “human infrastructure.” It’s not yet assured either measure will get enough wider lawmaker support given the political splits in the US.

The benchmark 10-year US Treasury yield was little changed after climbing over the week. Investors took the latest comments from Federal Reserve officials in their stride, after the central bank reassured on supportive policy while signalling that exceptional stimulus is set to be trimmed gradually.

An MSCI gauge of global stocks is on course for its best week since April, underpinned by the economic reopening from the health crisis. Risks such as faster inflation, the prospect of tighter monetary policy and more infectious coronavirus variants have yet to sap sentiment materially.

“Infrastructure spending strengthens an already very strong economic growth outlook,” said Jeff Buchbinder, equity strategist at LPL Financial. Those investments will “bolster the outlook for corporate profits and should keep this bull market going strong well beyond 2021.”

The Mexican peso rallied, spurred by an unexpected central bank interest-rate increase. But the Bank of England pushed back against speculation that a surge in U.K. inflation heralds higher borrowing costs. The pound edged lower.

West Texas Intermediate crude oil stayed above $73 a barrel. Traders are awaiting upcoming deliberations among Opec+ producers that may lead to a supply hike. Bitcoin extended a rebound from a swoon earlier in the week.