SYDNEY (Reuters) – Asian stocks advanced on Monday as successful launches of coronavirus vaccines globally raise hopes for a quick economic recovery amid new Washington fiscal aid as oil prices go up increase due to increased tensions in the Middle East.
MSCI’s broader Asia-Pacific stock index outside Japan jumped 0.4% to 736.4.
Japan’s Nikkei rose 1.1%, although data showing the country’s recovery from the worst post-war recession slowed in the fourth quarter.
Australia’s benchmark index added 0.9%, while E-mini futures for the S&P 500 rose 0.3% in early Asian operations.
The markets of China and Hong Kong are closed for the Lunar New Year holidays. U.S. stock markets will remain closed Monday for Presidents’ Day holiday.
The highlight of the week will probably be the minutes of the January meeting of the U.S. Federal Reserve, where policymakers decided to leave rates unchanged.
Inflation data is due in the UK, Canada and Japan, while on Friday major economies, including the US, will release their February Purchasing Managers ’(PMI) preliminary indices.
While economists expect inflation to remain benign for some time, the so-called “reflation trade” has gained momentum in recent days, mainly led by coronavirus vaccines and hopes of a massive fiscal spending under the President of the United States, Joe Biden.
Biden pushed for the first major legislative achievement of his term, turning to a bipartisan group of local officials for help with his $ 1.9 trillion coronavirus relief plan.
“In our opinion, as long as the (inflation) rise is gradual, equity markets can continue to perform well. However, undisciplined moves would certainly hurt investor sentiment, ”said Esty Dwek, head of global market strategy, Natixis Investment Managers Solutions.
“Credit spreads have narrowed sharply, but they still have room to absorb higher yields, which makes us more comfortable with credit risk than interest rate risk,” Dwek added.
“Commodities would be the beneficiaries of an inflationary cycle, but they can still continue to recover without high core inflation as economies reopen and demand increases.”
Oil prices rose to their highest level since January 2020 in the hope that the U.S. stimulus would boost the economy and fuel demand.
Prices also rose after a Saudi-led coalition fighting in Yemen said it intercepted an explosive-laden drone fired by the Houthi group, aligned with Iran, raising fears of new tensions in the East. Medium. [O/R]
Brent crude rose from $ 1 to $ 63.43 a barrel. U.S. crude gained $ 1.2 to $ 60.7.
On Friday, the S&P 500 and Nasdaq set record highs. The Dow finished 0.1% up 31,458.4 points, the S&P 500 gained 0.5% to 3,934.83 and the Nasdaq added 0.5% to 14,095.47. [.N]
Currency action has been silenced.
The dollar was slightly higher against the Japanese yen at 105.01, while the euro rose to $ 1.2125 and the British pound rose 0.3% to $ 1.3886. Risk-sensitive Australian and New Zealand dollars rose 0.1% each.
This left the dollar index stable at 90,426.
Bitcoin barely traded in the first Asian transaction at $ 47,994, below a record high of $ 49,714.66. It posted gains of about 20% in a milestone week marked by the endorsement of big companies like Elon Musk’s Tesla.
Swati Pandey reports to Sydney; Edited by Kim Coghill and Jacqueline Wong