Asian stocks hit record high as vaccine hopes dampen viral fears

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FILE PHOTO: A woman wearing a protective mask, following the coronavirus (COVID-19) outbreak, walks past a screen showing the Nikkei Index outside a brokerage in Tokyo, Japan November 5 2020. REUTERS / Kim Kyung-Hoon

Middle East and Africa

Tom Westbrook



SYDNEY (Reuters) – Asian stocks hit an all-time high on Monday as vaccine optimism and strong economic data from China and Japan eclipsed concerns over rising coronavirus cases, raising roughly all sectors.

The largest MSCI index for Asia-Pacific stocks outside of Japan
.MIAPJ0000PUS
gained 1% to its highest level since its launch in 1987, with markets in the region hitting record highs.

Nikkei du Japon
.N225
traded at 29-year highs, South Korea’s Kospi
.KS11
highest since early 2018 and the Australian ASX 200
.AXJO
hit an eight-month high in the morning, before a problem stopped trading. [.T][.KS][.AX]

Futures S&P 500
SC1
rose 0.6% after the index’s record close on Friday, Nasdaq 100 futures
NQc1
jumped 1% and European futures rose strongly with EuroSTOXX 50 futures
STXEc1
up 0.8% and FTSE futures
FFIC1
up to half a percent.

“There are only mountains of money on the sidelines waiting to be put to work and since we have this vaccine news, as well as the diminishing risk around the US election, it all turns into stocks. Said Kyle Rodda, analyst at IG Markets. “Everyone now thinks this is the signal to enter.”

Currencies and commodities markets were a bit more cautious, but the dollar was down a bit against traded currencies and oil prices strengthened after falling on Friday. [FRX/][O/R]

Japanese economic growth, which has broken records and forecasts to pull the world’s third largest economy out of recession and better than expected industrial production in China, added to the enthusiastic mood, as did a weekend trade deal. end.

Despite the details, 15 Asia-Pacific economies, including China and Japan, but excluding the United States, have agreed to cut future tariffs at a time of growing protectionism elsewhere.

REASONS TO BE CAREFUL

The flow-induced gains came despite many reasons for concern. US President Donald is preparing for a protracted transition to President-elect Joe Biden.

Axios reported that Trump is forecasting a wave of aggressive political action against China in the next 10 weeks.

Coronavirus cases are increasing in Europe and the United States and new outbreaks have appeared in South Korea, Japan and Australia. Brexit talks are again at a delicate crossroads.

A wave of state-owned company failures in China has also scared bond investors on the mainland.

A few of these fears have dampened currency market moves and left oil, the indicator of global growth, well below last week’s highs as traders brace for a bleak winter.

“The risk of even tighter restrictions is looming in order to contain the spread of the virus,” said Vivek Dhar, commodities analyst at the Commonwealth Bank of Australia. “The demand for oil is particularly exposed to restrictions that limit mobility since transport accounts for two-thirds of global oil consumption.”

On the Brexit front, the departure of hard-line adviser Dominic Cummings from Downing Street is seen as a positive, perhaps allowing for more British concessions, but chief negotiator David Frost said on Twitter that the talks “may not succeed ”.

The pound has climbed higher against the dollar
GBP =
and euro
EURGBP =
. Common currency
EUR =
rose 0.1% against the dollar to $ 1.1848.

The kiwis
NZD = D3
rose 0.5% to $ 0.6883 as the Australian dollar trailed a bit ahead of a week of central bank speeches and important data, starting with Reserve Bank of Australia Governor Philip Lowe, at 8:40 a.m. GMT.

A large number of speakers from the US Federal Reserve are also up this week, starting with Vice President Richard Clarida at 19:00 GMT.

Bonds, which had sold sharply on vaccine news last week, were flat where they left off on Friday, with the yield on benchmark US 10-year debt
US10YT = RR
at 0.8930%, down from last week’s high above 0.97%. [US/]

Oil prices edged up, with Brent futures
LCOc1
up 0.7% to $ 43.08 a barrel but below the two-month high of $ 45.30 last week. American gross
CLc1
rose 1% to $ 40.55 a barrel. [O/R]

Or
XAU =
rose 0.4% to $ 1,896 an ounce. [GOL/]

© 2020 Reuters. All rights reserved.

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