GLOBAL MARKETS-Asian stocks soar to record highs on global recovery hopes

GLOBAL MARKETS-Asian stocks soar to record highs on global recovery hopes

Reuters  | Jan 08, 2021 14:50

GLOBAL MARKETS-Asian stocks soar to record highs on global recovery hopes

* MSCI Asia ex-Japan +1.56%; Nikkei hits 30-year high
* Hopes for vaccines, U.S. stimulus turbocharge sentiment
* Dollar rises on recovery expectations

By Andrew Galbraith and Imani Moise
SHANGHAI/NEW YORK, Jan 8 (Reuters) - Asian shares vaulted to
record highs on Friday and Japan's Nikkei hit a three-decade
peak as investors looked beyond rising coronavirus cases and
political unrest in the United States to focus on hopes for an
economic recovery later in the year.
European share markets were set to follow Asia higher, with
pan-region Euro Stoxx 50 futures STXEc1 up 0.77%, German DAX
futures FDXc1 up 0.83% and FTSE futures FFIc1 up 0.46%.
U.S. S&P 500 e-mini stock futures ESc1 also pointed to a
cheery open on Friday, rising 0.51% to 3,815.
The upbeat mood came after Wall Street hit record highs on
Thursday while bond prices fell as markets bet a new
Democratic-controlled U.S. government would lead to heavy
spending and borrowing to support the country's economic
"Market participants are fairly optimistic with how things
are progressing, whether it's in the political landscape,
particularly of course in the United States the potential for
more stimulus certainly is a boon to the economy," said James
Tao, analyst at CommSec in Sydney.
"You've got the vaccines now coming through, getting the
approvals - it's all happening pretty quickly," he added.
The buoyant mood lifted MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS up 1.56%,
touching a record high.
Seoul's Kospi .KS11 led the way, charging 4% higher, also
to a record high. In Tokyo, the Nikkei .N225 added 2.36%,
hitting its highest level since August 1990. The
dollar-denominated Nikkei share average rose above its 1989 peak
to a record high. Hong Kong's Hang Seng .HSI rose 1.05% despite reports the
Trump administration was considering banning U.S. entities from
investing in an expanded list of Chinese companies in the waning
days of the presidency, and despite the removal of major Chinese
telecoms firms from FTSE Russell and MSCI indexes. Chinese blue-chip shares .CSI300 pulled back 0.7% as
investors booked profits after the index finished at a 13-year
high a day earlier.
On Thursday, the Dow Jones Industrial Average .DJI rose
0.69%, the S&P 500 .SPX gained 1.48% and the Nasdaq Composite
.IXIC added 2.56% - with all three indexes finishing at record
closing highs.
The gains follow expectations that Democratic control of
both U.S. houses of Congress will help the party of
President-elect Joe Biden push through larger fiscal stimulus
and comes despite political unrest in Washington, DC.
U.S. government officials have begun weighing removing
President Donald Trump from office before Biden's inauguration
date of Jan. 20, after Trump supporters stormed the U.S. Capitol
building. Rising risk appetite weighed on bonds, pushing benchmark
U.S. yields higher. Ten-year notes US10YT=RR yielded 1.1% on
Friday, up from 1.017% on Thursday. The 30-year bond US30YT=RR
yielded 1.8768%, up from 1.845% Thursday.
The dollar held onto its gains helped by the rising yields.
The dollar index =USD edged up against a basket of currencies
to 89.836 with the euro EUR= down 0.07% to $1.2262.
The greenback was up by 0.1% against the yen to 103.90.
"We're sure to see a synchronised global recovery in the
second half of this year," said ING analyst Carsten Brzeski.
"Right now, there's lots of concern about the virus and
noise surrounding the vaccine. But we need to take a slightly
longer view."
Cryptocurrency bitcoin BTC=BTSP traded down about 2.6% at
$38,486 after topping $40,000 for the first time on Thursday on
high demand from institutional and retail investors. Market
watchers have said a pullback is likely following its recent
run-up. In commodity markets, oil traders continued to focus on
Saudi Arabia's pledge to deepen production cuts. Brent crude LCOc1 was up 0.57% at $54.69 a barrel, near
11-month highs. U.S. West Texas Intermediate (WTI) CLc1 rose
0.59% to $51.13.
Spot gold XAU= dipped 0.28% to $1,907.21 per ounce.

Global assets
Global currencies vs. dollar
Emerging markets
MSCI All Country Wolrd Index Market Cap

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