© Reuters. ARCHIVE PHOTO: A man stands on an overpass with an electronic board showing Shanghai and Shenzhen stock indexes in Shanghai
By Hideyuki Sano
TOKYO (Reuters) – Global equities held steady on Tuesday, with a solid basis to extend their hike to the 12th consecutive session, as optimism about the global economic recovery and expectations of low interest rates drive investment riskier assets.
Oil prices skyrocketed to a 13-month high as a deep freeze due to a heavy snowstorm in the United States not only boosted energy demand, but also threatened oil production in Texas.
The broader MSCI index for Asia Pacific stocks outside Japan rose 0.1%, while it rose 0.4% to a 30-year high.
Mainland China markets will remain closed for the Lunar New Year until Wednesday, while Wall Street was also closed on Monday.
futures were traded 0.5% above to a record high and the MSCI global all-country index (ACWI), which has risen every day so far this month, has risen slightly.
“Global markets started the week on a high, as investors remain confident that the pandemic will soon lead to an economic boom,” wrote Mihir Kapadia, chief executive of Sun Global Investments in London.
“Unless there are drastic moves this week, we can expect the stock markets to remain strong.”
The successful launch of COVID-19 vaccines in many countries is raising hopes for a greater recovery in economic activities hampered by a variety of anti-virus restrictions.
US President Joe Biden is pursuing his plan to inject $ 1.9 trillion in extra stimuli into the economy, in an additional boost to market sentiment.
“The pace of market recovery has been very fast, but there is no denying that it is a very comfortable time for stocks with low interest rate expectations helping to boost stocks,” said Masahiro Ichikawa, chief strategist at Sumitomo Mitsui. (NYSE 🙂 DS Asset Management.
The optimistic view of the economy raised bond yields, with 10-year US Treasury bonds gaining 5 basis points, to 1.252% at the start of Asian trading, the highest since the end of March.
Investors await the minutes of the January meeting of the US Federal Reserve, due to be published on Wednesday, to confirm their commitment to maintaining their dovish political stance in the near future. This, in turn, is set to control bond yields.
But some analysts say investors should be on the lookout for bond yields.
“If US bond yields continue to rise, it could start to destabilize stocks,” said Ichikawa of Sumitomo Mitsui Asset.
Oil prices skyrocketed to their highest level in about 13 months, with a winter storm in the U.S. adding fuel to its recovery in hopes of a further recovery in demand.
futures traded 1.1% higher at $ 60.11 a barrel.
Prices have risen in recent weeks due to tight supply, largely due to production cuts by the Organization of Petroleum Exporting Countries (OPEC) and producers allied with the broader group of OPEC + producers.
The rise in oil prices supported currencies linked to commodities, such as the Canadian dollar, while safe haven currencies, including the US dollar, were in the background.
The pound sterling held steady at $ 1.3910, remaining at its highest levels since April 2018.
The offshore hit a 2 1/2 year high of 6.4010 per dollar overnight and the last was 6.4032.
MSCI’s emerging market currency index also hit a record high.
The yen weakened to 105.36 per dollar, approaching its four-month low of 105.765, set on February 5, while the euro was little changed at $ 1.2129.
traded at $ 48,204, close to its $ 49,715 record set on Sunday.