SYDNEY (Reuters) – Asian equities faltered on Monday amid concerns that problems with the deployment of vaccines combined with new strains of COVID-19 delay a global economic recovery that has already become rich in market valuations .
MSCI’s broader Asia-Pacific stock index outside of Japan fell 0.4%, after four consecutive sessions of losses. The Japanese Nikkei bounced 0.4%, after losing almost 2% on Friday.
S&P 500 futures lost another 0.7% in heavy trading, while NASDAQ futures fell 0.9%.
Distributors also cautiously awaited new developments in the battle that took hold of retail investors and funds specializing in deficit stocks.
According to an analysis by Goldman Sachs Inc., U.S. hedge funds bought and sold the largest number of shares in more than ten years amid wild changes on GameStop Corp.
On Monday there was talk that silver was the new target for retailers, as the metal jumped 5.7% to a six-month high.
Still, many analysts see this entertaining episode as a side-by-side demonstration compared to signs of loss of momentum in the United States and Europe as coronavirus blockages bite.
In fact, a survey by China on Sunday showed that factory activity grew at the slowest pace in five months in January, as restrictions affected some regions.
The news about the launch of vaccines was not positive either, especially considering the doubts about whether they will work in new strains of COVID.
“It’s these considerations, not what happens to a day-to-day video game retailer, that have weighed on risky assets,” said John Briggs, head of global strategy at NatWest Markets. “Much of the market’s valuations, particularly risk, are based on the fact that we can see a light at the end of the COVID tunnel.”
Doubts have also arisen about the future of President Joe Biden’s $ 1.9 trillion relief package, with 10 Republican senators urging a $ 600 billion plan.
Stock concerns only sparked a brief ripple in Treasury bond yields that rose late last week, perhaps a reflection of the ongoing lending tide.
For this quarter, a record gross cash issue of $ 1.11 trillion is forecast, up from $ 685 million in the same period last year.
Earlier Monday, U.S. 10-year yields remained at 1.07% and approached the last ten months at 1.187%.
Higher yields combined with the more cautious market mood have seen the safe haven dollar remain above its recent lows. The dollar index stood at 90.628, after rebounding from a range of 89.206 reached in early January.
The euro slowed to $ 1.2121, far from its most recent peak of $ 1.2349, while the dollar remained steady at 104.74 yen.
Gold followed silver higher to $ 1,853 an ounce, but has repeatedly stagnated at resistance around $ 1,875. [GOL/]
Concerns about global demand kept oil prices under control. U.S. crude eased 30 cents to $ 51.90 a barrel, while futures on Brent crude fell 20 cents to $ 54.84. [O/R]
Edited by Shri Navaratnam