SYDNEY (Reuters) – Asian equities rose on Monday as concerns over rising COVID-19 cases and delays in vaccine delivery were overshadowed by expectations of a $ 1.9 fiscal stimulus plan trillion to help revive the US economy.
Global stock markets have reached record levels in the past few days with bets that COVID vaccines will begin to reduce inflection rates worldwide and with a stronger economic recovery in the US under President Joe Biden.
Still, investors are also concerned about high ratings amid questions about the effectiveness of vaccines in containing the pandemic and as US lawmakers continue to debate a coronavirus aid package.
The broader MSCI index for Asia Pacific stocks outside Japan rose slightly to 721.96 and just a short distance from last week’s record of 727.31.
The benchmark is up 8.5% so far in January, on the way to its fourth consecutive monthly increase.
Japan’s Nikkei rebounded from declines at the start of the session to rise 0.36%.
Australian stocks also rose a little further after the country’s drug regulator approved the Pfizer / BioNTech COVID-19 vaccine, with officials saying that a phased implementation will begin at the end of next month.
Chinese stocks rose, with the first-tier CSI300 index up 0.6%.
“The spotlight will be in Washington DC this week,” said Stephen Innes, Axi’s chief global markets strategist.
The Biden administration tried to dispel Republican concerns that its $ 1.9 trillion pandemic relief proposal was too expensive, with lawmakers from both parties saying they agreed that providing Americans with the COVID-19 vaccine should be a priority. .
Financial markets are eyeing a massive US economic stimulus, although divergences have meant months of indecision in a country that suffers more than 175,000 cases of COVID-19 a day with millions of unemployed.
“Advances in vaccines make it likely that life will become more functional again sometime in 2021, resulting in greater GDP growth and more robust corporate gains,” said Innes.
“But the increase in global COVID infections19, new variants of the virus, restrictions on social distance and delays in the launch of vaccines in some places, increase the risks of short-term growth.”
Global cases of COVID-19 are advancing to 100 million, with more than 2 million dead.
Hong Kong blocked an area of the Kowloon peninsula on Saturday, the city’s first step since the pandemic began.
He reports that the new UK variant COVID was not only highly infectious, but perhaps more deadly than the original strain, it also raised concerns.
In the European Union, political leaders expressed widespread dismay at the delay of AstraZeneca and Pfizer Inc in delivering the promised doses, with Italy’s prime minister attacking vaccine suppliers, saying the delays represented a serious breach of contractual obligations.
On Friday, the Dow fell 0.57%, the S&P 500 lost 0.30% and the Nasdaq added 0.09%. The top three US indices closed higher on the week, with the Nasdaq rising more than 4%.
Analysts at Jefferies said the US stock markets looked overvalued, although they remained optimistic.
“For the stock market to have a really nasty turnaround, instead of just a bull market correction, there needs to be a catalyst,” said analyst Christopher Wood.
“This means an economic slowdown or a material tightening of Fed policy,” said Wood, adding that neither should be in a hurry.
In the currencies, the main pairs were trapped in a narrow range, while the markets awaited a meeting of the US Federal Reserve on Wednesday.
The dollar index was stable at 90.19, with the euro at $ 1.2169, while the pound sterling was traded at $ 1.3691.
The Japanese yen remained unchanged at 103.77 per dollar.
In commodities, oil prices fell, with Brent falling 12 cents to $ 55.29 a barrel and US oil falling 3 cents to $ 52.24.
Gold rose with spot prices rising 0.2% to 1,855.9 an ounce.
Editing by Sam Holmes and Shri Navaratnam