TOKYO (Reuters) – Global equities rebounded on Friday and Asian equities recovered from a three-month low as investors focused more on optimism about the global economic recovery than rising tensions between the West and China.
European stocks appear to be opening up more, with Euro Stoxx futures rising 0.8% and British FTSE futures gaining 0.61%.
MSCI’s former Asian Japan index rose 1.43% after hitting a three-month low on Thursday as Shanghai’s composite index gained 1.53%, achieving a three-day streak lost.
On Thursday, Chinese stocks fell about a three-month low earlier this month. The European Union joined Washington’s allies this week in imposing sanctions on officials in the Chinese region of Xinjiang for allegations of human rights abuses, prompting retaliatory sanctions from Beijing.
“All the sanctions so far have been largely symbolic and should have little economic impact. But the Sino-US confrontation affects market sentiment. It could take a while to reach any compromise, ”said Yasutada Suzuki, head of emerging market investments at Sumitomo Mitsui Bank.
The Japanese Nikkei rose 1.47% after Wall Street shares staged a rally, driven by cyclical and economic stocks that have been hit by the pandemic.
The Dow Jones Industrial Average rose 0.62% and the S&P 500 gained 0.52%, while the Nasdaq Composite added just 0.12%.
“It’s at the end of the month, at the end of the quarter and for Japanese players, at the end of the fiscal year, so we’re seeing random flows of all kinds of players,” said Masanari Takada, investment strategist at Nomura Securities.
“But in general, those who led the reflation trade based on their positive view of the Chinese economy are now closing their positions, while those who failed to ride in this wave are looking to see if they have to buy down “.
While markets were more driven by various end-of-quarter businesses than by news feeds, analysts noted that the headlines of the night were mostly support for equities.
Data from the U.S. Department of Labor showed that claims for unemployment benefits fell to a one-year low last week, a sign that the U.S. economy is on the verge of stronger growth in as the public health situation improves.
At his first formal press conference, U.S. President Joe Biden said he would double his administration’s vaccine deployment plan after reaching the previous target of 100 million shots 42 days earlier than expected.
But while the improvement in the U.S. health care crisis has sustained global risk appetite, investors are increasingly alarmed by a divergence in health conditions.
“Vaccination in continental Europe is lagging behind. In relation to the United States, economic reopenings are likely to be delayed, as some countries are forced to impose closures, “Soichiro Matsumoto, Japan’s director of investments, told Credit Suisse’s private banking unit in Tokyo.
This put pressure on the euro, which licked its wounds at $ 1.1782 after falling to $ 1.1762 overnight, the lowest levels since November.
The dollar also rose to 109.21 yen, a surprising distance from last week’s nine-month high of 109.365 yen.
The US currency index stood near its highest level since mid-November, after gaining 2.0% so far this month.
Oil prices rebounded slightly after falling 4% on Thursday, although they are on track for their third consecutive week of losses due to concerns about a further reduction in demand. [O/R]
In addition to Europe, major developing economies such as Brazil and India are also struggling to resurrect COVID-19 cases.
The market still gained some support over concerns over the supply disruption, as a container ship stranded in the Suez Canal could block the vital lane for weeks.
US crude rose 1.33% from behind, to $ 59.35 a barrel, and Brent, to $ 62.62, up 1.08%.
Additional reports from Katanga Johnson in Washington; edition by Richard Pullin, Ana Nicolaci da Costa and Lincoln Feast.