TOKYO (Reuters) – Asian stocks advanced on Tuesday, putting global equities on track to expand their bull for a 12th consecutive session as optimism about the global economic recovery and the expectations of low interest rates drive investments in riskier assets.
The oil price rose to a 13-month high as a deep freezing point due to a severe snowstorm in the United States, which not only increased demand for power but also threatened oil production in Texas.
MSCI’s broadest Asia-Pacific equities index outside Japan rose 0.45%, while Japan’s Nikkei rose 0.4% to a 30-year high.
In Hong Kong, the Hang Seng index rose 1.79%, reaching a 32-month high during the first trading session since Thursday after the New Year holiday.
Chinese markets on the mainland will remain closed for the holidays until Thursday, while Wall Street will also be closed on Monday.
Ord Milett adviser John Milroy said the stock markets were positive but that investors were becoming wary of the future inflation threat due to stimulus programs from the central bank and the government.
“There is a clear sense for rates that will remain low for some time to come and investors’ appetite for equities will remain strong. We will probably see the market hold for some time to come,” Milroy told Reuters.
‘The pull is the idea that inflation could rise much faster and faster than the Fed currently thinks. If they then raise rates to combat it, what happens to stock markets and of course bond markets? ”
The bullish view on the economy has boosted the rate of return, and the US treasury for ten years has risen 5 basis points to 1.245% in early Asian trade, the highest since late March.
Investors are looking at the minutes of the US Federal Reserve’s January meeting, which will be published on Wednesday, to confirm that they are committed to maintaining its policy on the near future. It is again aimed at keeping the returns of the bonds.
But some analysts say investors need to keep a close eye on bond yields.
“If US yields continue to rise, it could make stocks uneasy,” said Masahiro Ichikawa, chief strategist at Sumitomo Mitsui DS Asset Management.
S & P500 futures traded 0.65% higher to a record level and MSCI’s world index (ACWI), which has been rising every day so far this month, has tapped slightly.
Successful deployment of COVID-19 vaccines in many countries raises hopes for further recovery in economic activities hampered by various antivirus curbs.
US President Joe Biden continues his plan to inject an extra $ 1.9 billion stimulus into the economy to boost market sentiment.
Oil prices have risen the highest in about 13 months as a U.S. winter storm added to their rally in hopes of further recovery in demand.
US crude futures rose 1.1% at $ 60.11 a barrel.
Prices have risen over the past few weeks with the tightening of inventories, mainly due to production reductions from the Organization of the Petroleum Exporting Countries (OPEC) and related producers in the larger OPEC + group of producers.
Rising oil prices have supported commodity-linked currencies, such as the Canadian dollar, while safe-haven currencies, including the US dollar, have lagged behind.
The British pound held $ 1.3910 and remained at its highest levels since April 2018.
The Chinese Chinese yuan hit a 2-1 / 2-year high of 6.4010 per dollar overnight and last stood at 6.4030.
MSCI’s emerging market currency index also reached a record high.
The yen weakened to 105.36 per dollar, falling closer to the four-month low of 105.765 set on February 5, while the euro was up 0.1% at $ 1.2142.
In Asia, Bitcoin traded at $ 48,088.28, at its record high of $ 49,715 on Sunday.
Additional reporting by Tomo Uetake in Sydney; Edited by Shri Navaratnam