Middle East and Africa
Hideyuki Sano
TOKYO (Reuters) Asian stocks hit a record high on Wednesday with investors betting on a strong economic recovery next year, as there are few signs that policymakers are refuting massive stimulus efforts aimed at fending off the downturn in coronavirus.
MSCI’s benchmark for Asia-Pacific equities, excluding Japan, rose 1.2% to a record high, led by the rise in Chinese equities and 18.8% gains so far this year.
The Nikkei stock in Japan lost 0.45% on its last trading day of 2020 after jumping to a 30-year high on Tuesday. For the year, it increased by 16.0%.
European equities may fall slightly with Euro Stoxx 50 futures up 0.2% and FTSE futures down 0.1%.
The belief that global monetary authorities will continue to pump liquidity into the banking system to support the pandemic-plagued economy supports the risk assets.
‘We think sustained monetary and fiscal policy support means investors need to take risks. Stocks will outperform bonds. In bonds, corporate bonds must beat government bonds, ”said Hiroshi Yokotani, head of the Asia-Pacific fixed-income firm.
E-Mini futures contracts for the S&P 500 rose 0.41%, erasing the losses made the previous day after US Senate Majority Leader Mitch McConnell voted on President Donald’s call Trump to increase COVID-19 relief tests.
While many Republican senators remain stubbornly concerned about the cost to taxpayers, support is growing among them, including two from Georgia, who are taking part in key races that will determine who will control the Senate.
END OF ILLUSION?
Even a disturbing spread of a COVID-19 variant in many countries has so far done little to curb investors’ appetite.
The United States has observed its first known case of the highly contagious coronavirus strain already observed in Britain and South Africa.
But there may be a crack in the market euphoria, said Yasuo Sakuma, chief investment officer of Libra Investments. He noted that some red-hot U.S. small-cap stocks, such as biotechnology and software-as-service stocks, could not succeed in a broader rally.
‘There are many loss-making companies worth more than $ 10 billion. I think the time has come for the illusion that they can make money by doing business only in a virtual world. Soon, these businesses will not be able to attract more money just because they have a good business idea or some good test products. he said.
The Russell 2000, a U.S. stock index that includes small-cap stocks, fell 1.85% on Tuesday.
In the foreign exchange market, the dollar fell on the first day of trading for settlement in 2021 when traders began to plunge the safe haven US currency anew.
The euro rose 0.3% to $ 1.2295, a level last seen in April 2018.
“The launch of COVID – 19 vaccination campaigns in several countries, as well as additional US fiscal support, reduce the negative risk to the world economy and predict good general sentiment in the financial market,” analysts at the Commonwealth Bank of Australia said in a statement. note said.
The Australian dollar rose 0.6% to $ 0.7663, hitting a 2 1/2 year high, while the sterling traded 0.30% at $ 1.3556.
The Japanese yen also rose 0.15% to 103.36 per dollar.
The US dollar index lost 0.25% and stood at 89,798, after reaching a 2 1/2 year low of 89,711 at one point.
A sluggish dollar supported gold, with the price of gold up 0.14% at $ 1,880.70 per ounce. [GOL/]
Oil prices boosted profits after a setback overnight as investors hoped an expanded stimulus from the US pandemic would stimulate demand for fuel and drive economic growth.
The average U.S. crude futures contract in West Texas rose 0.21% at $ 48.10 a barrel. [O/R]
The treasury has changed little after trading sideways in the thin trade amid the year-end holiday. US two-year yields were stable at 0.127% and the standard ten-year yield at 0.9364%. [US/]