TOKYO / NEW YORK (Reuters) – Asian stocks rallied Wednesday, following modest Wall Street gains as expectations that a vaccine will eventually win the fight against the coronavirus sparked hopes of recovery, while tight supply expectations push oil prices to a one-year pushed full.
MSCI’s widest index of Asia-Pacific stocks outside Japan rose 0.61%, while Japan’s Nikkei 225 rose 1.12%.
Chinese stocks were up 0.07%, while South Korea’s KOSPI was up 1.05%. The Australian S & P / ASX 200 reversed losses and added 0.18%.
US equity futures increased slightly by 0.18%.
Treasuries extended their rally by pulling the benchmark’s 10-year yield further away from the highest in nearly a year, flattening the yield curve slightly.
Euro Stoxx 50 futures were down 0.03%, German DAX futures down 0.03% and UK FTSE futures down 0.18%, indicating a moderate start to European trading.
Investors are betting that the upcoming Biden government would ramp up U.S. distribution of coronavirus vaccines and spend a lot of money on more stimulus packages, contributing to a global economic recovery and greater demand for commodities, analysts said.
Hugh Young, head of Asia Pacific at Aberdeen Standard Investments, said he expected investor interest in Asia to continue in the second half of 2020 this year.
The eternal question is overvaluation. Asian markets have done extremely well, which is a bit frustrating, but the quality is definitely there in Asia, the momentum is in Asia, so it looks like it will be a stable year and a positive year for Asia, ”said Young at a panel at the Reuters Next conference.
On Wall Street, stocks fluctuated virtually unchanged throughout the session, not far from record highs. The Dow was up 0.19%, the S&P 500 was up 0.04% and the Nasdaq Composite added 0.28%.
US West Texas Intermediate (WTI) rose 1.13% to $ 53.81 a barrel, hitting its highest level since February following a larger than expected drop in US crude oil inventories. Brent crude rose 1.27% to $ 57.30. [API/S]
Oil prices were also supported after Saudi Arabia said it plans to cut production by an additional 1 million barrels per day in February and March.
Some investors followed developments in Washington after at least three Republicans said they would join Democrats on Wednesday in a vote expected to impeach President Donald Trump on Wednesday over the recent turmoil in the Capitol.
With seven days left in his tenure, Trump is charged with impeachment on charges that he incited uproar in a speech to his followers last week before hundreds of them stormed the Capitol, killing five. Trump says his speech was appropriate.
An impeachment process could continue even after Trump left office on Jan. 20, but analysts say they do not expect further political turmoil in Washington to affect markets.
“The markets have been quite strong since the election as the uncertainty factor has been removed,” said Peter Essele, chief of portfolio management at Commonwealth Financial Network in Boston.
The yield on the 10-year US government debt fell to 1.1240% on Wednesday, down from a year high of 1.1870% reached in the previous session following a well-received auction of new 10-year bonds.
The yield curve, which had hit the steepest since May 2017 based on expectations for major fiscal stimulus under a new democratic government, slipped slightly to 97.5 basis points.
The dollar saw losses on Wednesday as a drop in US interest rates erased its recent rally.
Against the yen, the greenback fell 0.12% to 103.65. The dollar also fell slightly to $ 1.3683 against the British pound.
Safe haven gold added 0.2% to $ 1,860.13 an ounce.
Reporting by Stanley White in Tokyo and Chibuike Oguh in New York; Edited by Sam Holmes, Ana Nicolaci da Costa and Kim Coghill