Friday, 19th April, 2024
Friday, 19th April, 2024

Asian markets track Wall St records on reopening hopes

Equities pushed ever higher in Asian
trade on Tuesday following another record-breaking performance on Wall Street
as vaccinations are rolled out, infections fall and investors bet Joe Biden
will be able to push through his massive stimulus.

While there is a growing sense of concern that valuations may have gone too
far for now, having enjoyed a strong rally in recent months, the general mood
is one of optimism that the global economy will break out as life gradually
returns to normal.

The president’s $1.9 trillion rescue bill is winding its way through
Congress and while Biden might not get the broad bipartisan deal he had hoped
for, Democrats’ majority in both houses is likely to be enough for them to
pass a large package.

The giant spending splurge, which includes $1,400 cash handouts, comes as
the US immunisation programme gathers pace and figures show new cases, deaths
and hospitalisations are tumbling.

A similar picture is emerging in Britain while Europe is also seeing
improvements.

Adding to the positivity, statistics out of Israel — which has led the
world in vaccinations — appear to show the jabs are working.

“Financial markets are forward-looking, and it looks like the US and Europe
have Covid cases heading in the right direction,” said OANDA’s Edward Moya.

“Reflation bets are running wild and that could be enough to keep this
stock market party going.”

All three main indexes on Wall Street ended at new highs and Asia extended
the rally.

Seoul led gains, jumping one percent while Hong Kong, Tokyo, Shanghai,
Singapore, Jakarta and Manila were also well in the green.

Axi strategist Stephen Innes said buying was “further buoyed by an upbeat
set of earnings from the holiday season and vaccine optimism”.

The inoculation drive, he said, “provides the ultimate recovery safety net
that will allow people to participate on all those pre-Covid activities like
the simple pleasures of going to a movie or having a meal out at the local
eatery again”.

Crude prices continued to climb on expectations for a surge in demand as
economies reopen, with Brent holding around 13-month highs above $60.

“Oil’s fundamentals are looking strong again on both (the) supply and
demand side,” said Moya.

“Despite demand being down about five million barrels year-over-year,
optimism is high that vaccine rollouts will have key parts of the global
economy return to normal.”

Bitcoin pushed to a new record of $47,492.93 after getting a huge boost
from news that Elon Musk’s electric carmaker Tesla had invested $1.5 billion
in the cryptocurrency and said it would soon accept it as payment.

Gold was also seeing increasing interest from dealers seeking out the safe
haven as a hedge against an expected jump in inflation with the world economy
kicking back into gear and Biden’s stimulus being rolled out.

The yellow metal has risen around three percent since hitting a two-month
low on Friday and was trading at $1,841 an ounce.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 0.4 percent at 29,497.51 (break)

Hong Kong – Hang Seng: UP 0.3 percent at 29,400.01

Shanghai – Composite: UP 0.4 percent at 3,547.98

Dollar/yen: DOWN at 105.10 yen from 105.22 yen at 2150 GMT

Pound/dollar: UP at $1.3756 from $1.3741

Euro/dollar: UP at $1.2062 from $1.2049

Euro/pound: UP at 87.69 pence from 87.67 pence

Brent North Sea crude: UP 0.7 percent at $60.97 per barrel

West Texas Intermediate: UP 0.7 percent at $58.35 per barrel

New York – Dow: UP 0.8 percent at 31,385.76 (close)

London – FTSE 100: UP 0.5 percent at 6,523.53 (close)

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