Asian markets gain after U.S. stocks rally on infrastructure deal

“The breakthrough in infrastructure spending talks overnight has lifted sentiments, with spending plans historically being a positive for the markets,” said Yeap Jun Rong, market strategist at IG in Singapore. “Sectors leaning towards economic recovery and reopening may see strength.”

In Tokyo, Panasonic Corp.
6752,
+4.93%
jumped after a report that it has sold its entire stake in Tesla Inc.
TSLA,
+3.54%
for nearly $4 billion.

A recovery in the U.S. economy is a boon for this export-driven region. Although the vaccine rollout in Asia has lagged most parts of U.S. and Europe, the perk from an overseas recovery is likely to come long before herd immunity against the coronavirus pandemic.

On Wall Street, the S&P 500 marked another record high, beating the peak it set early last week. Stocks added to their gains in the afternoon after Biden announced the infrastructure deal, which is sure to benefit companies in the construction industry.

The plan, costing $973 billion over five years, is the culmination of months of talks, and a larger spending plan from Biden is still possible later this year.

Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said the proposed agreement is favorable for industrials, financials and energy stocks, although “the general re-opening of the economy and renewed, post-Covid-19 economic growth is the most likely driver” of the market going forward.

The S&P 500 index
SPX,
+0.58%
rose 24.65 points, or 0.6%, to 4,266.49. The Dow Jones Industrial Average
DJIA,
+0.95%
rose 322.58 points, or 1%, to 34,196.82. The Nasdaq
COMP,
+0.69%
added 97.98, or 0.7%, to 14,369.71.

Markets have calmed since the Federal Reserve surprised investors last week by saying it could start raising short-term interest rates by late 2023, earlier than expected, if recent high inflation persists.

The super-low rates the Fed engineered to carry the economy through the pandemic have propped up prices across markets, and any change would be a big deal, so the Fed’s announcement triggered selling of stocks and a rise in Treasury yields last week. However that selling reversed this week. The three major indexes are all up more than 2% this week and are once again near records.

In energy trading, benchmark U.S. crude
CLQ21,
+0.07%
rose 14 cents to $73.44 a barrel. Brent crude
BRNQ21,
+0.07%,
the international standard, gained 16 cents to $75.72 a barrel.

In currency trading, the U.S. dollar
USDJPY,
-0.10%
rose to 110.91 Japanese yen from 110.87 yen.

MarketWatch contributed to this report.