TOKYO (Reuters) – Global equities rebounded on Friday, with Asian stocks rebounding from a three-month low, with investors focusing more on optimism about the global economic recovery than on increasing tensions between the West and China.
European equities look set to open higher, with Euro Stoxx futures up 0.8% and Britain’s FTSE futures up 0.61%.
The MSCI index, formerly Asia Japan, rose 1.43% after hitting a nearly three-month low on Thursday, with the Shanghai Composite Index gaining 1.53%, breaking a three-day losing streak.
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, ”said Yasutada Suzuki, head of investment in emerging markets at Sumitomo Mitsui Bank.
Japan’s Nikkei rose 1.47% after Wall Street shares rose, driven by cyclical and cheap stocks that were affected 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%.
“It is the end of the month, the end of the quarter and for Japanese players, the end of the financial year, so we are seeing random flows from all types of players,” said Masanari Takada, cross-asset strategist at Nomura Securities.
“But on the whole, those who led the reflective trade based on their positive view of the Chinese economy are now closing their positions, while those who didn’t catch the wave are looking to see if they should buy low.”
Although markets were being driven more by several end-of-quarter trades than by the flow of news, analysts 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 $ 1.1782, after falling to $ 1.1762 overnight, its lowest levels since November.
The dollar also rose to 109.21 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.
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 oil rose 1.33% to $ 59.35 a barrel and Brent, $ 62.62, up 1.08%.
Additional reporting by Katanga Johnson in Washington; edition by Richard Pullin, Ana Nicolaci da Costa and Lincoln Feast.