SYDNEY (Reuters) – Asian equities faltered on Monday amid concerns that vaccine rollout problems, along with new strains of COVID-19, will delay a global economic recovery already baked into the market’s rich valuations .
MSCI’s broadest index of Asia-Pacific equities outside Japan fell 0.4% after four straight sessions of losses. The Japanese Nikkei jumped 0.4%, after shaking off almost 2% on Friday.
Futures for the S&P 500 lost another 0.7% in heavy trading, while NASDAQ futures fell 0.9%.
Traders have also been waiting for new developments in the substantial battle between retail investors and funds specializing in short-circuiting.
US hedge funds have been buying and selling the most shares in more than ten years amid wild swings in GameStop Corp, according to an analysis by Goldman Sachs Inc.
The discussion on Monday was that silver was the new target for retail, as the metal rose 5.7% to a six-month high.
Yet many analysts view this entertaining delivery as a side effect compared to signs of a loss of momentum in the United States and Europe as the coronavirus closures bite.
Indeed, a survey by China on Sunday showed that activity in the factory grew at its slowest pace in five months in January, as restrictions in some regions took a toll.
The news about the deployment of vaccines was also not positive, especially as there were doubts about whether it would work on new COVID strains.
“It is these considerations, which do not happen to the daily trader of a video gamer, that weigh the risk assets,” said John Briggs, Global Strategy Head at NatWest Markets. “So much of the valuation of the market, especially the risk, is based on the fact that we can see a light at the end of the COVID tunnel. ‘
Doubts have also been raised about the future of President Joe Biden’s $ 1.9 billion relief package, with ten Republican senators calling for a $ 600 billion plan.
The stock turmoil caused only bonds with Treasury yields to rise slightly late last week, perhaps a reflection of the tidal wave of loans that were underway.
A record $ 1.11 billion in Treasury gross spending is planned for this quarter, up from $ 685 billion at the same time last year.
Early Monday, U.S. yields held ten-year highs at 1.07% and near the recent ten-month high of 1.187%.
Higher yields combined with the more cautious market sentiment have kept the safe-haven dollar steady above its recent lows. The dollar index stood at 90,628, after jumping out of a 89,206 trough in early January.
The euro turned at $ 1.2121, lowering its recent high of $ 1.2349 while holding the dollar at 104.74 yen.
Gold followed silver higher at $ 1,853 per ounce, but repeatedly resisted at $ 1,875. [GOL/]
Global issues are holding oil prices in check. U.S. crude oil fell 30 cents to $ 51.90 a barrel, while Brent crude futures fell 20 cents to $ 54.84. [O/R]
Edited by Shri Navaratnam