© Reuters. MANAGEMENT PHOTO: A man stands on a viaduct with an electronic board showing the stock index of Shanghai and Shenzhen in Shanghai
By Hideyuki Sano
TOKYO (Reuters) – Global equities held on Tuesday, with a solid base to extend their bull run to 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 largest Asia-Pacific equities index outside Japan rose 0.1%, rising 0.4% to a 30-year high.
The Chinese markets on the mainland will be closed until Wednesday, while Wall Street will also be closed on Monday.
futures traded 0.5% higher to a record level and MSCI’s world index (ACWI), which has been rising every day so far this month, has risen slightly.
“Global markets started higher this week as investors are confident that the pandemic will soon give way to an economic boom,” wrote Mihir Kapadia, chief executive of Sun Global Investments in London.
“Unless there are any drastic moves this week, we can expect the stock markets to remain strong.”
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.
“The pace of the rise in the market has been fairly rapid, but there is no denying that this is a reasonable time for equities with the expectation of low interest rates that will help the inflow of equities,” said Masahiro Ichikawa, chief strategist at Sumitomo Mitsui (NYSE 🙂 DS Asset Management.
The positive view of the economy increased bond yields, while the US Treasury gained 5 basis points to 1.252% in early Asian trade for ten years, the highest since the end of 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 Ichikawa Sumitomo Mitsui Asset.
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.
futures traded 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.
Abroad, it reached a 2-1 / 2 year high of $ 6.4010 per dollar overnight and last stood at 6.4032.
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 changed little at $ 1.2129.
traded at $ 48,204, near its record high of $ 49,715 on Sunday.