Hong Kong’s Hang Seng Index (HSI) rallied 2.75% Thursday, putting the index on track for its best day since July. South Korea’s Kospi (KOSPI) rose 2.4%, also on pace for its best day in months. Japan’s Nikkei (N225) was up 1.7% and China’s Shanghai Composite (SHCOMP) rose 1.3%.
Markets in Asia took their cue from Wall Street, where stocks rallied Wednesday. The Dow closed up 368 points, or 1.3%, higher. At its highest level, the index was up more than 800 points in Wednesday’s session. The S&P ended 2.2% higher. The Nasdaq closed 3.9% higher.
The momentum continued after-hours. Dow (INDU) futures were last up 148 points, or about 0.5%. S&P 500 (SPX) futures rose 0.8% and Nasdaq (COMP) futures were up 1.6%.
Even though a delayed and contested election result was heralded as the market’s “nightmare scenario,” stocks rallied all day. Experts believe a delay was already priced in by investors and say that the possibility that a Republican Senate would restrain a Democratic White House is giving stocks a boost.
If Republicans hold the Senate, they will want to stop what they see as the Joe Biden “spending agenda” and “runaway federal debt,” which will mean less fiscal stimulus and no corporate tax increases, said Jon Lieber, managing director with consultancy Eurasia Group.
The Republicans are fundamentally a “small government, low tax party” that doesn’t want to see spending rates growing so much, Lieber said during a Wednesday seminar held by Eurasia Group.
In Europe, the Bank of England held interest rates at 0.1% but added £150 billion ($195 billion) to its bond buying program as the country continues to grapple with fallout from the coronavirus pandemic. England has re-entered a national lockdown to counter a surge in Covid-19 cases and deaths.
Meanwhile, Alibaba’s Hong Kong traded shares rose 5.6% — paring back some of the steep losses the stock suffered after Chinese regulators hit the brakes on the IPO of Ant Group, the e-commerce giant’s financial affiliate. Shares in Alibaba (BABA) closed up 3.6% in New York on Wednesday.
Alibaba will report earnings Thursday, along with Cinemark (CNK), GM (GM) and Square (SQ).
— CNN’s Jill Disis and Anneken Tappe contributed to this report.