SYDNEY (Reuters) – Asian equities rose to near-historic levels on Monday as concerns over rising COVID-19 cases and delays in vaccine delivery were eclipsed by the optimism of a $ 1 fiscal stimulus plan , 9 trillion to help revive the US economy.
Sentiment in the region was also driven by a report that China had overtaken the United States to be the largest recipient of foreign direct investment in 2020, with $ 163 billion in inflows.
Futures markets also pointed to a firmer start elsewhere. E-mini futures for the S&P 500 rose 0.37%, eurostoxx 50 futures, as well as London’s FTSE, rose 0.3% each, while Germany’s DAX rose 0.4%.
“The history of FDI has definitely lifted China and its close neighbors today, blowing a wind in favor of economic recovery in geographically adjacent markets,” said OANDA market analyst in Singapore Jeffery Halley.
“Looking ahead, stocks will find more significant reactions to the progress or otherwise of the Biden stimulus package, and the level of dovishness exhibited by the Federal Reserve at its FOMC meeting this week.”
Global stock markets have reached record levels in the past few days with bets that COVID-19 vaccines will begin to reduce infection rates worldwide and with a stronger US economic recovery 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 to 726.46, almost reaching last week’s record of 727.31.
The benchmark is almost 9% so far in January, on the way to its fourth consecutive monthly increase.
Japan’s Nikkei rebounded from declines at the beginning of trading to rise 0.7%.
Australian equities rose 0.4% after the country’s drug regulator approved the Pfizer / BioNTech COVID-19 vaccine, which will likely be phased out at the end of next month.
Chinese stocks rose, with the first-tier CSI300 index up 1.1%. Hong Kong’s Hang Seng index jumped almost 2%, led by technology stocks.
All eyes are on Washington DC, as U.S. lawmakers agreed that providing Americans with the COVID-19 vaccine should be a priority, even if they worry about the size of the U.S. pandemic relief package.
The financial markets are eyeing a huge package, although the differences have meant months of indecision in a country that suffers more than 175,000 cases of COVID-19 a day with millions of unemployed.
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 currencies, major pairs were trapped in a narrow range, while markets awaited the Fed’s meeting on Wednesday.
The dollar index fell to 90.073, with the euro at $ 1.2181, while the pound sterling was a little firmer at $ 1.3721.
The Japanese yen was a little weaker at 103.69 per dollar.
In commodities, Brent gave up on initial losses to stay stable at $ 55.41 a barrel and U.S. oil rose 3 cents to $ 52.30.
Gold was stable at $ 1,852.9 an ounce.
Editing by Shri Navaratnam and Jacqueline Wong