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Asian stocks rose as US stimulus plan offsets virus problem



Reuters Sydney (Reuters)-Asian stocks rose on Monday, overshadowed by market expectations that a $1.9 trillion fiscal stimulus package will help revitalize the US economy.

File photo: A man wearing a face mask after the outbreak of the coronavirus disease (COVID-19) ran to an electric board showing the Nikkei index outside an agent in the business district of Tokyo, Japan on January 4, 2021.Reuters/Jin Qing-Xun

Due to bets that the COVID vaccine will begin to reduce the global inflection point rate and the strong economic recovery in the United States led by US President Joe Biden, global stock markets have recently hit a record high.

Nonetheless, due to doubts about the effectiveness of vaccines in controlling the flu pandemic, and US lawmakers continue to debate coronavirus assistance programs, investors are also cautious about overvaluing.

The MSCI̵

7;s broadest stock index in the Asia-Pacific region outside of Japan rose slightly to 721.96, a short distance from last week’s record high of 727.31.

The benchmark index has risen 8.5% so far in January and is expected to rise for the fourth consecutive month.

Japan’s Nikkei Index rebounded from the early decline, rising 0.36%.

After the Australian drug regulator approved the Pfizer/BioNTech COVID-19 vaccine, the Australian stock market also rose slightly. Authorities said that the phased promotion will begin at the end of next month.

The Chinese stock market rose, with the blue-chip Shanghai and Shenzhen 300 Index rising 0.6%.

Stephen Innes, chief global market strategist at Axi, said: “This week will be the focus of Washington, DC.”

The Biden administration is trying to dispel Republican concerns because their $1.9 trillion pandemic mitigation proposal is too expensive, and legislators on both sides said they have agreed that giving the COVID-19 vaccine to Americans should be a priority.

Financial markets have been paying attention to the US’s massive economic stimulus plan, although the disagreement means months of indecision in the country. The country suffers from more than 175,000 COVID-19 cases every day and millions of people are unemployed.

Innes said: “The breakthrough in vaccines makes it possible for people to return to life again sometime in 2021, leading to faster GDP growth and stronger corporate earnings.”

“But the global increase in COVID19 infections, new variants of the virus, strict restrictions on social isolation distances, and delays in vaccine launches in certain places all increase the risk of near-term growth.”

The global COVID-19 cases are gradually approaching 100 million, and the death toll exceeds 2 million.

Hong Kong sealed off the Kowloon Peninsula on Saturday, the first such measure taken by Hong Kong since the pandemic began.

The report said that the new British COVID variant is not only highly contagious, but also more lethal than the original strain that has increased anxiety.

In the European Union, political leaders expressed widespread frustration at AstraZeneca and Pfizer Inc.’s refusal to provide promised doses. The Italian Prime Minister severely criticized vaccine suppliers, saying that the delay seriously violated contractual obligations.

On Friday, the Dow Jones index fell 0.57%, the S&P 500 index fell 0.30%, and the Nasdaq index rose 0.09%. The three major US stock indexes closed higher for the week, and the Nasdaq index rose more than 4%.

Jefferies analysts said that although US stock markets remain bullish, they seem to be overvalued.

Analyst Christopher Wood (Christopher Wood) said: “To make the stock market really out of trouble, not just a bull market adjustment, there must be a catalyst.”

Wood said: “This means that the economy is down or the Fed’s policy is substantially tightened.” He added that neither of these situations will happen in a hurry.

In terms of currencies, as the market waited for the Fed meeting on Wednesday, major currency pairs fell into tight fluctuations.

The dollar index was flat at 90.19, the euro was at 1.2169 against the dollar, and the pound was last at 1.3691.

The yen was flat against the dollar at 103.77 per dollar.

In terms of commodities, oil prices fell, with Brent crude falling 12 cents to 55.29 US dollars per barrel, and US crude oil falling 3 cents to 52.24 US dollars per barrel.

Gold rose, and the spot price rose 0.2% to $1,855.9 per ounce.

Edited by Sam Holmes and Shri Navaratnam


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