SYDNEY (Reuters) – Asian stocks soared near record highs on Monday as oil surpassed $ 60 a barrel in hopes that a $ 1.9 trillion COVID-19 aid package will be passed by US lawmakers this month, just if coronavirus vaccines are rolled out worldwide.
In a sign that the European and US markets would start strong, eurostoxx futures and the German DAX each gained 0.7%, while London’s FTSE futures added 0.6%. E-mini futures for the S&P 500 were up 0.4% in early Asian trading.
The mood was upbeat in Asia, with all major indices posting gains.
MSCI’s widest index of Asia-Pacific stocks outside Japan rose 0.5% to 721.11, not far from its all-time high of 730.16 reached late last month.
The Japanese Nikkei jumped about 2% while the Australian stocks ended 0.6% higher. Chinese stocks went up with the blue-chip CSI300 index by 1.3%.
Hopes of a faster economic recovery and supply restriction by producer group OPEC and its allies pushed oil to its highest level in a year when it surpassed $ 60 a barrel. [O/R]
Global stock markets have hit record highs in recent days in hopes of a faster economic recovery led by the successful introduction of vaccines and the expectations of a major US pandemic relief package.
Friday, the Nasdaq and S&P 500 hit record highs thanks to better-than-expected fourth-quarter operating results and as companies were on track to post first-quarter earnings growth rather than a decline. [.N]
The rallies came even as US data painted a poor picture of the country’s labor market, with a wage hike of 49,000, half what economists expected.
The weak report spurred the push for more stimulus and underscored the need for lawmakers to act on President Joe Biden’s $ 1.9 trillion COVID-19 aid package.
Biden and his Democratic allies in Congress continued their stimulus plan on Friday when lawmakers approved a budget plan that would allow them to work without Republican backing for the next few weeks.
US Treasury Secretary Janet Yallen predicted that the United States would have full employment next year if Congress can approve its bailout package.
“That’s a big appeal as full employment is 4.1%, but one that fits the market well at a time when the vaccination program is being rolled out efficiently in a number of countries,” said Chris Weston, Melbourne chief strategist. Pepperstone.
However, expectations of an economic recovery in the US have not boosted the dollar, “because this shift in outlook is seen by the market as part of a global recovery,” Westpac economists wrote in a note.
“Investors therefore prefer risk-taking, and therefore value the security of the US dollar less.”
Indeed, the greenback came off a four-month high against the Japanese yen and was last at 105.50.
The euro was slightly weaker at $ 1.2036 after climbing 0.7% on Friday to a week high.
The risk-sensitive Australian dollar fell from a week high to $ 0.7675.
In commodities, Brent crude oil and US crude oil climbed 59 cents each to $ 59.93 and $ 0.57.44 respectively.
US gold futures rose 0.1% to $ 1,815.4 an ounce.
Edited by Shri Navaratnam and Jacqueline Wong