Asian markets gain on hopes Biden will act on economy, virus

Asian shares were mostly higher ahead of Joe Biden's inauguration as U.S. president Wednesday, though worries about surging coronavirus cases sapped the Japanese market s early gains.

Japan's benchmark Nikkei 225 slipped 0.4% to finish at 28,523.26. Australia's S&P/ASX 200 added 0.4% to 6,770.40, while South Korea's Kospi edged up 0.6% to 3,112.03. Hong Kong's Hang Seng added 0.7% to 29,835.04, while the Shanghai Composite rose 0.1% to 3,570.40.

Hopes are growing that Biden’s planned stimulus for the American economy as well as measures to curb the pandemic will boost regional markets

While many Asian nations have fared better in the pandemic than European countries and the U.S., worries still run high. Main urban areas in Japan, including Tokyo, are under a state of emergency, with evening dining discouraged. Critics say that's not enough, as deaths related to COVID-19 have been rising.

“Chinese New Year is less than a month away. With COVID infection numbers already on the rise again in parts of Asia, there are concerns about what the holiday season may mean for efforts to contain the virus’s spread,” said Stephen Innes, chief global market strategist at Axi.

On Wall Street, the S&P 500 rose 30.66 points, or 0.8%, to 3,798.91, pulling to within 1% of its record high set earlier this month. The Dow Jones Industrial Average added 116.26 points, or 0.4%, to 30,930.52. The Nasdaq composite gained 198.68 points, or 1.5%, to 13,197.18.

About 60% of the companies in the S&P benchmark index rose. Technology, communication services and health care stocks accounted for much of the rally, though energy sector companies notched the biggest gain.

Traders continued to bid up shares in smaller companies, a sign of confidence in the prospects for future economic growth. The Russell 2000 index picked up 27.94 points, or 1.3%, to 2,151.14.

U.S. markets were closed Monday in observance of Martin Luther King Day.

The gains this week marked a reversal from last week, when stocks ran out of steam after a strong start to the year. Markets have been rising on enthusiasm about a coming economic recovery as more people are inoculated with COVID-19 vaccines and Washington gets set to try for another round of economic stimulus.

Janet Yellen, Biden’s nominee to be Treasury secretary, told the Senate Finance Committee during her confirmation hearing that the incoming administration would focus on winning quick passage of its $1.9 trillion pandemic relief plan.

“More must be done,” Yellen said. “Without further action, we risk a longer, more painful recession now — and long-term scarring of the economy later.”

The plan would include $1,400 cash payments for most Americans. Democrats are also pushing for faster rollout of COVID-19 vaccines, a higher minimum wage for workers and enhanced benefits for laid-off workers. The hope is that such stimulus can carry the economy until later this year, when more widespread vaccinations get life returning to some semblance of normal.

“If most of this is implemented, it does suggest significant pickup in economic growth as we head through to the fourth quarter of this year,” said David Kelly, chief global strategist at JPMorgan Funds.

In energy trading, benchmark U.S. crude added 31 cents to $53.29 a barrel. Brent crude, the international standard, rose 35 cents to $56.25.

In currency trading, the U.S. dollar slipped to 103.74 Japanese yen from 103.99 yen. The dollar cost $1.2146, up from $1.2115.

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AP Business Writers Stan Choe, Damian J. Troise and Alex Veiga contributed.