HONG KONG (Reuters) – Asian stocks rose on Tuesday, paving the way for global stocks to extend their hike for the 12th consecutive session, with investors betting on launching coronavirus vaccines to keep the global economic recovery on track .
Oil prices jumped to a 13-month peak due to a deep freeze due to a strong snowstorm in the United States not only boosted energy demand, but also threatened oil production in Texas.
Rising Asian stocks open the way for renewed optimism in global markets.
The S & P500 futures were up 0.5% and the MSCI global all-country index (ACWI), which has risen every day so far this month, has risen slightly.
The broader MSCI index for Asia Pacific stocks outside Japan rose 0.62%, while Japan’s Nikkei rose 1.4%, to a 30-year high.
In Hong Kong, the Hang Seng Index climbed 1.4% to hit its 32-month high, while Australia’s S & P / ASX200 gained 0.7% in the session. Mainland China markets will remain closed on the holiday until Thursday.
The positive sentiment was also extended to Bitcoin, which flirted with breaking the $ 50,000 barrier.
Bitcoin was trading at $ 49,323.56 on the Asian trading session of the afternoon, slightly below its record $ 49,715 set on Sunday.
JPMorgan Private Bank head of investment strategy in Asia, Alex Wolf, said the launch of the coronavirus vaccine is giving investors confidence that global growth will be protected in 2021.
“This is a positive factor that we are entering into the process of economic normalization,” said Wolf.
Ord Minnett adviser John Milroy said that while equity markets were positive, investors were becoming cautious about the future risk of inflation due to the central bank and government stimulus programs in place around the world.
“There is a clear feeling that rates will remain low for some time and investors’ appetite for shares will remain strong, we are likely to see the markets continue for some time,” Milroy told Reuters.
“Gaining momentum is the thought that inflation could rise much faster and earlier than the Fed is currently thinking. So, if they raise rates to fight it, what will happen to the stock markets and, of course, the bond markets. “
The optimistic view of the economy raised bond yields, with 10-year US Treasury bonds gaining 5 basis points, to 1.24% in Asian trade, 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, this could start to destabilize stocks,” said Masahiro Ichikawa, chief strategist at Sumitomo Mitsui DS Asset Management.
Wolf said JPMorgan’s private bank predicts that the 10-year U.S. yields could reach 1.5% by the end of 2021, with investors again betting on more economic stimulus that may help the outlook for global growth.
“An increase in production is not a major concern for the rest of the world. It is the rate of increase that tends to be more important from an Asian point of view. If there is a rapid repricing, it could have a negative effect on emerging markets, ”he said.
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.
US oil futures were trading up 1.1% at $ 60.11 a barrel.
Additional reporting by Tomo Uetake in Sydney; Editing by Shri Navaratnam and Richard Pullin