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GLOBAL MARKETS-Asian shares rise on vaccine bets but analysts urge caution

Published 11/12/2020, 11:03 AM
Updated 11/12/2020, 11:10 AM
© Reuters.
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* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Equities broadly supported by vaccine hopes
* Oil continues rally after U.S. crude drawdown
* Some analysts warn of market correction

By Stanley White and Lawrence Delevingne
TOKYO/BOSTON, Nov 12 (Reuters) - Asian shares rose toward a
more than two-year peak on Thursday, buoyed by sustained global
stimulus efforts and hopes of a coronavirus vaccine, but some
analysts warned of the risk of a correction lower.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.44%, approaching the highest since
January 2018. Chinese shares .CSI300 rose 0.37%. Stocks in
Japan .N225 rose 0.62% to a 29-year high.
Australian stocks .AXJO bucked the regional trend and fell
0.31% as a decline in copper prices hurt shares in miners. S&P
500 stock futures EScv1 fell 0.15%.
Oil futures rose toward two-month highs due to optimism
about a vaccine and a larger-than-expected drawdown in U.S.
crude inventories.
The gains in Asia came after a mixed performance for U.S.
stocks as investors switched back to technology stocks and away
from economically sensitive sectors as they weighed COVID-19
vaccine progress and the likely timing of an economic rebound.
"The markets are waiting for more news about the virus, so
it is difficult for investors to short equities," said Daiju
Aoki, regional chief investment officer for Japan at UBS
Securities.
"These expectations can keep equities going for another few
weeks, but there are still questions about the effectiveness of
a vaccine and about U.S. fiscal policy. We could see a
correction early next year."
The Dow Jones Industrial Average .DJI fell 0.08% on
Wednesday, but the Nasdaq closed up 2%, and the S&P 500 .SPX
gained 0.77%.
Encouraging comments from European Central Bank chief
Christine Lagarde on continued economic support boosted European
shares for the third straight session. Moderna Inc MRNA.O said on Wednesday it is preparing to
submit data on its experimental COVID-19 vaccine to an
independent safety board, which should help determine the
vaccine's efficacy. Pfizer PFE.N also said on Monday that its vaccine was more
than 90% effective and it may release safety data later this
month. Investors the world over are keenly awaiting details on
both drugs, but some analysts warn it will still take a long
time to distribute an effective vaccine.
In the currency market, the New Zealand dollar NZD=D3
soared for a second straight session to a 19-month high as
investors unwound bets on the introduction of negative interest
rates.
The kiwi got an added boost after Reserve Bank of New
Zealand Assistant Governor Christian Hawkesby said the economy
required less stimulus than it did in August. The U.S. dollar edged lower against the Japanese yen
JPY=D3 and the Chinese yuan CNY=CFXS as traders adjusted
positions before U.S. President-elect Joe Biden takes office
next year.
Global oil benchmark Brent LCOc1 rose 0.48% to $44.01 a
barrel, approaching a two-month high. U.S. crude futures CLc1
also gained 0.55% to $41.62 a barrel.
"Crude markets remain torn by the bleak near-term picture
with curfews, closures and shutdowns becoming more widespread
across the U.S. and Europe; and the medium-term picture where
vaccines may bring a return to more normal conditions," Westpac
analysts for Australia and New Zealand wrote in a note Thursday.
Spot gold XAU= edged up 0.22% to $1,868.76 an ounce.
Benchmark 10-year Treasury yields US10YT=RR fell slightly
to 0.9406% and the yield curve US2US10=TWEB flattened in Asian
trade. The U.S. bond market was closed on Wednesday in
observance of Veterans Day after the 10-year yield reached the
highest level since March.


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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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(Editing by Stephen Coates and Sam Holmes)

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