Par Hideyuki Sano et Elizabeth Dilts Marshall
TOKYO / NEW YORK (Reuters) – Asian stocks advanced on Tuesday as prospects for a deal by European Union leaders to jointly fund their economies’ recovery and hopes of a coronavirus vaccine raised l appetite for risk.
rose 0.6% as the largest MSCI Asia-Pacific equity index outside of Japan gained 1.5% to close to its four-month high reached earlier this month.
On Wall Street, tech stocks surged after several days of slump, pushing the 2.51% rise to a record closing high on Monday. The S & P500 also hit a five-month high.
gained 0.25% in Asian trade to sit near its highest since early March.
European Union leaders appeared close to a deal on a massive stimulus package for their coronavirus-hit economies, EU Council President Charles Michel expressing confidence
to reach an agreement on the recovery fund of 750 billion euros.
“They are currently discussing a compromise on the distribution of the fund between grants and loans. The question is no longer whether we will have a fund or not, ”said Nobuhiko Kuramochi, market strategist at Mizuho Securities.
“The United States will likely adopt stimulus measures by the first week of August. We don’t know its exact size, but I bet it will be between $ 1 and $ 1.5 trillion. ”
Advisers to President Donald Trump and Congressional Democrats were scheduled to discuss next steps to respond to the coronavirus crisis on Tuesday.
Although coronavirus infections have increased in recent weeks in the south and west of the country, investors are hoping that another economic package, which will come after a $ 3 trillion stimulus earlier this year, will help the economic tide for a difficult time.
Hope that COVID-19 vaccines could be ready by the end of the year has also bolstered at-risk assets, following promising first data from trials of three potential vaccines.
The positive mood, however, will face more reality checks later this month, as the earnings season is in full swing in many countries in the coming weeks.
“If companies give stronger indications than market expectations, it will be positive for stocks. But is this really possible in today’s uncertain environment? ”Said Tatsushi Maeno, senior strategist at Okasan Asset Management.
“I think we need to be careful in the stock markets for the short term. ”
In the currency market, the Chinese yuan edged up to its strongest level since early March, helped by recent signs of recovery in the Chinese economy. The amount reached 6.9804 per dollar.
The euro was near Monday’s four-month high, at $ 1.14675, as traders looked to the end result of the EU summit marathon that began on Friday. It last traded at $ 1.1459.
The yen was little moved to 107.19 to the dollar.
Gold held steady at $ 1,818 an ounce, after hitting a 9-year high of $ 1,820.4 on Monday.
The metal retains its strength as the ultimate store of value as central banks around the world have committed to an unprecedented level of money printing to support economies hit by the pandemic.
rose 0.1% to $ 43.35 a barrel, while US West Texas Intermediate (WTI) was held steady at $ 40.94.
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