Pedestrians walk past a display showing closing information of the Nikkei Stock Average in Tokyo, Japan, 24 November 2020.

TOKYO (REUTERS) – Asian stocks made strong early gains on Wednesday (Nov 25), following a world rally overnight that saw the Dow Jones benchmark crack 30,000 for the first time as investors cheered a dramatically improved global outlook.

The main drivers of that exuberance were increasing confidence a Covid-19 vaccine would be ready soon and the formal start of US president-elect Joe Biden’s transition to the White House, which ends weeks of post-election political uncertainty.

As investors look to 2021, analysts say they are betting the economic recovery will gain steam and that forthcoming virus vaccine shots will ease uncertainty and enable people to pack airplanes and fill stadiums, restaurants and other places hardest hit by crisis.

President Donald Trump’s apparent willingness to comply with the formal transfer of power also boosted investor sentiment, following weeks of legal challenges to the election results. The General Services Administration told Biden this week that he could formally begin the handover process.

Reports that Biden planned to nominate former Federal Reserve chair Janet Yellen as Treasury Secretary – a move that could shift the focus heavily toward efforts to tackle growing economic inequality – also cheered markets.

Japan’s Nikkei 225 gained 1.9 per cent, Australia’s S&P/ASX 200 rose 0.8 per cent while South Korea’s Kospi index was up 0.5 per cent.

Singapore’s Straits Times Index was up 1 per cent at 9.33am local time.

Hong Kong’s Hang Seng index futures rose 0.2 per cent.

E-mini futures for the S&P 500 rose 0.2 per cent.

“Sentiment is running very hot as we come to the end of a cracker month for risk assets, so it does make you wonder whether the market is starting to exhibit signs of euphoria, and is due for a bit of a retracement in the short-term,” said IG Australia markets analyst Kyle Rodda.

“But for all the risks the pandemic poses over the next few months…market participants appear happy to look through it all, and position for a post-pandemic world.”

On Wall Street, the Dow Jones Industrial Average rose 1.54 per cent, the S&P 500 gained 1.62 per cent and the Nasdaq Composite added 1.31 per cent.

The pan-European STOXX 600 index rose 0.91 per cent and MSCI’s gauge of stocks across the globe gained 0.08 per cent. Emerging market stocks rose 0.45 per cent.

Bitcoin rose over 5 per cent and has US20,000 in sight, with traders expecting volatility ahead due partly to Thursday’s Thanksgiving holiday in US markets. Gold fell for the fifth session in six.

“Trading conditions are likely to be volatile for the remainder of the week and crypto traders should expect US1,000 swings in the matter of minutes,” Edward Moya, senior market analyst at OANDA in New York.

US crude fell 0.18 per cent to US44.83 per barrel and Brent was at US47.91, up 4.02 per cent on the day while the dollar index fell 0.395 per cent, under pressure from Yellen’s expected push for fiscal stimulus, analysts say.

The yield on benchmark 10-year notes rose to 0.8848 per cent, from 0.882 per cent late on Tuesday.

Spot gold dropped 0.1 per cent to US1,806.36 an ounce.