By Alun John
HONG KONG (Reuters) – Asian stocks hit a nearly two-week high on Wednesday, prolonging a rally of global relief as investors applauded signs that the Omicron variant of the coronavirus could be less disruptive to the global economy than it was not feared at the start.
US and Nasdaq futures also rose, increasing 0.3% and 0.4% respectively, while pan-European contracts were flat.
“The markets are very sensitive to any small news about Omicron, and the lack of bad news is viewed very positively by the stock markets, although – and I’m no scientist – it seems too early to report a whole lot. is clear, ”said Stefan Hofer, chief investment strategist for private bank LGT in Asia-Pacific.
“With each new variant, we go through a period of waiting for a signal from the scientific community, which is difficult for the markets, but that’s what we had yesterday. “
The MSCI’s largest Asia-Pacific stock index outside of Japan rose 0.5% to its highest level since November 26, when news of the new variant rocked markets. increased by 1.2%.
The gains were widespread, with Korea peaking in six weeks. ()
British drugmaker GSK said on Tuesday that its antibody-based COVID-19 therapy with its US partner Vir Biotechnology (NASDAQ 🙂 was effective against all Omicron mutations.
A South African study also suggested on Tuesday that booster doses of the COVID-19 vaccine produced by Pfizer Inc (NYSE 🙂 and its partner BioNTech could help fight infection with Omicron, although the study showed that the new strain may partially escape protection against two doses.
The reports helped the MSCI All Country World Index rise 2.1% on Tuesday, its biggest percentage gain since November 2020. Oil also rose more than 3%.
Markets are also focusing on US inflation data expected on Friday, with a high impression likely to point policymakers to accelerate the reduction of the Federal Reserve’s massive bond purchase program.
“The rally of relief could be short-lived if US data on Friday shows high inflation seems lingering or lingering – pick a word that’s not transient,” Hofer said.
Last week, Fed Chairman Jerome Powell said maybe it was time to stop viewing inflation as transient, suggesting the central bank could speed up the cut.
The two-year yield, which rises with higher interest rate expectations, was 0.6872% on Wednesday, just off Tuesday’s nearly two-year high of 0.6950%.
The benchmark index remained stable at 1.4614% after two days of gains. [US/]
This should support the dollar in the longer term, especially against other currencies with more accommodating central banks.
However, improving investor sentiment so far supports risky assets like the Australian dollar, which hit a week high of $ 0.7435 on Wednesday, recovering from a 13-month low in beginning of the week. [FRX/]
strengthened with onshore and offshore units reaching their firmest levels against the dollar in over three and a half years
The euro also gained some ground and the Canadian dollar remained strong at 1.2637 to the US dollar, supported by rising oil prices overnight, and ahead of a Bank of Canada policy meeting. later Wednesday.
Economists expect the Bank of Canada to keep rates unchanged at 0.25% at the meeting. Earlier Wednesday, India’s central bank kept its policy rate stable.
fell 0.17% to $ 71.93 a barrel. fell 0.11% to $ 75.36 a barrel.
rose 0.3% to $ 1,789 an ounce, in its recent range, and rival inflation hedge bitcoin was also calm after an exciting weekend, barely changing to $ 50,300.