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 rose 1% to its highest level since its launch in 1987, with markets in the region hitting record highs.
Japan’s Nikkei traded at 29-year highs, South Korea’s Kospi at its highest level since early 2018, and Australia’s ASX 200 hit an eight-month high in the morning, before a glitch interrupts the trade.
S&P 500 futures rose 0.6% after the index’s record close on Friday, Nasdaq 100 futures surged 1% and European futures rose sharply, EuroSTOXX 50 futures up 0.8% and FTSE futures up 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.
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 sterling rose against the dollar and the euro. The common currency rose 0.1% against the dollar to $ 1.1848.
The kiwi rose 0.5% to $ 0.6883 as the Australian dollar lagged a bit ahead of a week of central bank speeches and important data, starting with the Governor of the Reserve Bank of ‘Australia, 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.
The bonds, which had sold sharply on the vaccine news last week, remained stable where they left off on Friday, with the yield on benchmark 10-year US debt at 0.8930%, in down from last week’s high of over 0.97%.
Oil prices edged up as Brent futures rose 0.7% to $ 43.08 a barrel, but below the two-month high of $ 45.30 last week. US crude rose 1% to $ 40.55 a barrel.
Gold rose 0.4% to $ 1,896 an ounce.