Global Stocks Surge as Japan’s PM Takaichi Wins Big
Global equities experienced an uptick, with Tokyo’s Nikkei 225 share index surging by as much as 5 percent to reach a new high on Monday, following the victory of Japanese Prime Minister Sanae Takaichi’s ruling party, which achieved a two-thirds supermajority in the parliamentary elections. In early European trading, Germany’s DAX increased by 0.6 percent to 24,864.59, while the CAC 40 in Paris rose by 0.2 percent, reaching 8,288.06. Britain’s FTSE 100 experienced an increase of 0.3 per cent, reaching a level of 10,399.61. US futures experienced a modest increase following a robust recovery in the US stock market on Friday, driven by a rebound in technology stocks that regained a significant portion of their earlier losses, while bitcoin’s decline came to a halt. The future for the S&P 500 increased by 0.1 percent, whereas the Dow Jones Industrial Average saw an uptick of 0.2 percent. On Friday, the S&P 500 experienced a rally of 2 percent, marking its most significant performance since May. The Dow industrials experienced a remarkable increase of 2.5 percent, surpassing the 50,000 threshold for the inaugural occasion. The Nasdaq composite surged by 2.2 percent. The confluence of a resurgence in technology stocks, a rally on US Market, and additional positive developments propelled share prices higher at the start of Monday. In Tokyo, the Nikkei 225 concluded the trading session with an increase of 3.9 per cent, reaching a level of 56,363.94. Earlier in the day, the benchmark reached a new intraday record of 57,337.07. The dollar experienced a modest decline against the Japanese yen, now at 156.71 yen, a decrease from 157.10 yen observed late Friday. The decisive electoral triumph provides Takaichi with a significantly enhanced mandate to implement market-oriented policies.
NHK reported that, according to vote count results, Takaichi’s Liberal Democratic Party secured 316 seats by early Monday, comfortably exceeding the 261-seat threshold for an absolute majority in the 465-member lower house, which holds greater power in Japan’s bicameral parliament. That signifies a historic achievement since the party’s establishment in 1955, exceeding the former record of 300 seats secured in 1986 by the late Prime Minister Yasuhiro Nakasone. Overall, the LDP has transitioned from a notably weak government, unable to effectuate significant change, to a robust administration now empowered by a supermajority in the lower house, enabling them to dictate policy directions,” stated Neil Newman. Takaichi’s initial significant responsibility upon the lower house’s reconvening in mid-February will be to address a budget bill, which has been postponed due to the election, aimed at financing economic initiatives to tackle increasing costs and stagnant wages.Japan has produced an election outcome that markets tend to favor, as it alleviates the primary concern that traders value highly: political uncertainty,” noted Stephen Innes of SPI Asset Management in a commentary. Politically, the victory grants Prime Minister Takaichi greater autonomy and eliminates the necessity to negotiate each decision to the lowest common denominator,” he stated.
Other markets throughout Asia experienced a rally. In Seoul, the Kospi experienced an increase of 4.1 per cent, reaching 5,298.04, supported by robust demand for technology stocks. The Hang Seng index in Hong Kong experienced an increase of 1.8 percent, reaching 27,027.16, while the Shanghai Composite index saw a rise of 1.4 percent, settling at 4,123.09. Taiwan’s Taiex experienced an increase of 2 percent. In Australia, the S&P/ASX 200 experienced a notable increase of 1.9 per cent, reaching a level of 8,870.10. Advancements in computer chip firms significantly contributed to the broad-based rally observed on Friday. NVIDIA experienced a notable increase of 7.8 percent, while Broadcom saw a rise of 7.1 percent. The S&P 500 has experienced its third consecutive week of losses in the past four weeks. In addition to apprehensions regarding expenditures by major technology firms, which hold significant sway over Wall Street, there are also fears that artificial intelligence may divert clientele from software companies, further impacting market performance. Software stocks experienced significant declines following the release of free automation tools by AI firm Anthropic, which are designed to streamline services such as legal assistance.
In other dealings early Monday, bitcoin increased by 1 percent, trading just below 70,000. A weeklong decline resulted in a closing price near USD 60,000 late Thursday, representing a drop of more than fifty percent from its peak reached in October. The metals market has experienced a degree of stabilization after a series of pronounced fluctuations. Gold increased by 1.4 percent to USD 5048.90 per ounce, whereas silver experienced a rise of 6.2 percent to USD 81.64. US benchmark crude oil declined by 60 cents, settling at USD 62.95 per barrel. Brent crude, the international benchmark, declined by 60 cents to USD 67.45 per barrel. The euro appreciated to USD 1.1866 from USD 1.1814.
