TOKYO (Reuters) – Asian stocks rebounded from a three-month low on Friday, thanks to Wall Street bullishness later in the day, with optimism about the global economic recovery being overshadowed by mounting tensions between the West and the West. China.
The MSCI index, formerly Asia Japan, rose 0.37% after hitting a nearly three-month low on Thursday, while the Shanghai Composite Index gained 0.78%, breaking a three-day losing streak.
“The recent declines in Chinese stocks have been worrying, but there is no change in the fact that the Chinese economy is recovering,” said Yasutada Suzuki, head of investment in emerging markets at Sumitomo Mitsui Bank.
On Thursday, Chinese stocks fell close to a three-month low, reached earlier this month. The European Union joined Washington’s allies this week to impose sanctions on officials in China’s Xinjiang region on charges of human rights abuses, which led to Beijing’s retaliatory sanctions.
“All the sanctions so far have been largely symbolic and are expected to have little economic impact. But the Chinese-American confrontation is affecting market sentiment. It may take some time for them to reach an agreement, ”added Suzuki.
Japan’s Nikkei rose 0.89% after Wall Street stocks rose, driven by cyclical and cheap stocks that were hit by the pandemic.
The Dow Jones Industrial Average was up 0.62% and the S&P 500 was up 0.52%, while the Nasdaq Composite amounted to just 0.12%.
Analysts said the trades were being driven more by a rebalancing of investment portfolios at the end of the quarter by institutional investors than by the flow of news, although they noted that the evening’s headlines were mostly stock-friendly.
US Department of Labor data showed that unemployment benefit claims fell to a year-low last week, a sign that the US economy is on the verge of stronger growth with improving health conditions. public.
In his first formal press conference, US President Joe Biden said he would double his government’s vaccination plan after reaching the previous goal of 100 million shots 42 days ahead of schedule.
But while the improvement in the U.S. health crisis has sustained risk appetite around the world, investors are increasingly alarmed by a divergence in health conditions.
“Vaccination in continental Europe is delayed. In relation to the US, economic reopening is likely to be delayed, as some countries are forced to impose blockades, ”said Soichiro Matsumoto, Japan’s chief investment officer, at Credit Suisse’s private bank unit in Tokyo.
This put pressure on the euro, which licked its wounds at $ 1.1780 after dropping to $ 1.1762 overnight, its lowest levels since November.
The dollar also rose to 109.17 yen, a short distance from last week’s nine-month high of 109.365 yen.
The American currency index was close to its highest level since mid-November, having gained 2.0% so far this month.
“The dollar is absolutely critical,” said James Athey, chief investment officer at Aberdeen Standard Investments in London.
“If the dollar starts to rise, it becomes a problem. It means weakness in commodities and weakness in emerging markets and begins to provide a narrative of disinflationary compensation. “
Oil prices rebounded somewhat from the 4% drop on Thursday, although they are on track for their third consecutive week of losses due to concerns about a further reduction in demand. [O/R]
In addition to Europe, the main developing economies, such as Brazil and India, are also struggling with the resurgence of COVID-19 cases.
The market has also attracted some support from concerns about supply disruption, as a container ship stranded on the Suez Canal could block the vital transport route for weeks.
US crude rose 0.99%, to $ 59.14 a barrel, and Brent, $ 62.44, up 0.79%.
Additional reporting by Katanga Johnson in Washington; edition of Richard Pullin and Ana Nicolaci da Costa