SYDNEY (Reuters) – Asian stocks rose to a record high on Monday and oil rose to a high of more than a year as successful expansions against coronavirus vaccines worldwide gave rise to hopes of a rapid economic recovery. amid new fiscal aid from Washington.
MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 0.4% to 736.4.
The Japanese Nikkei climbed 1.3%, despite data showing that the country’s recovery slowed after its worst recession in the fourth quarter.
Australia’s benchmark index rose 1%.
E-mini futures contracts for the S&P 500 rose 0.2% in early Asian trading. US stock markets will be closed on Monday for the President’s holiday.
The highlight of the week will likely be minutes of the US Federal Reserve’s meeting in January, where policymakers decided to leave rates unchanged.
Data on inflation comes from the UK, Canada and Japan, while on Friday the largest economies, including the United States, will announce the preliminary index for purchasing managers in February.
Although economists expect inflation to remain good for some time to come, the so-called ‘reflection trade’ has been gaining momentum in recent days, led mainly by coronavirus vaccines and hopes for massive fiscal spending under US President Joe Biden.
Biden is campaigning for the first major legislative achievement of his term, turning to a dual group of local officials for help with his $ 1.9 billion coronavirus emergency plan.
“In our opinion, the stock markets can gradually continue to perform well as long as the rise (in inflation) continues. However, volatile movements will definitely hurt investor sentiment, ”says Esty Dwek, Head of Global Market Strategy, Natixis Investment Managers Solutions.
“Credit spreads have already increased sharply, but they still have room to absorb higher returns, making us more comfortable with credit risk than interest rate risk,” Dwek added.
“An inflationary cycle may be favored by commodities, but they may still continue to recover without high core inflation as economies reopen and demand increases.”
Oil prices have climbed to the highest level since January 2020, hoping that the US stimulus will boost the economy and demand for fuel. [O/R]
Brent crude rose 61 cents to $ 63.04 a barrel. U.S. crude rose 83 cents to $ 60.03.
On Friday, the S&P 500 and Nasdaq closed the record. The Dow ended 0.1% higher at 31,458.4 points, the S&P 500 rose 0.5% to 3,934.83 and the Nasdaq added 0.5% to 14,095.47. [.N]
The action in currencies has been muted.
The dollar was slightly higher against the Japanese yen at 105.07, while the euro was low at $ 1.2119 and the British pound rose 0.1% at $ 1.3868. The risk-sensitive Australian and New Zealand dollars remained unchanged.
This left the dollar index stable at 90,426.
Bitcoin barely changed in early Asian trading at $ 48,722, slightly below a record high of $ 49,000. It made a profit of about 20% in a milestone week marked by the approval of big companies like Tesla from Elon Musk.
Reporting by Swati Pandey in Sydney; Edited by Kim Coghill