Asian stocks hit an all-time high and U.S. equity futures gained on Wednesday as investors followed positive news on COVID-19 vaccines and ongoing efforts to launch more fiscal stimulus.
Investors are hoping that the new coronavirus vaccines now being given to the most vulnerable will begin to allow governments to eventually open up their economies and revitalize growth.
The largest MSCI index of Asia-Pacific stocks outside of Japan rose 0.51%. At one point, the index hit 646.10, an all-time high.
MSCI’s stock gauge across the world also hit an all-time high.
Australian stocks gained 0.69%.
Japan’s Nikkei rose 1.01 percent to approach a 29-and-a-half-year high. Investor sentiment was strengthened after Japanese data indicated a rebound in capital spending. Machine orders in Japan have jumped at the fastest rate in more than 10 years, adding to signs that the global economy continues to recover from the pandemic.
“During this year, non-residential investment probably fell by around 6%. But we expect business investment to return to pre-virus levels by early 2022 – much faster than the seven years it took after the global financial crisis, ”Tom Learmouth, Japanese economist, told research firm Capital Economics, in a note to Al Jazeera.
Stocks in China rose 0.15%. South Korean stocks also jumped 1.26% to trade near a near record high.
Wall Street winds higher
US S&P 500 e-mini stock futures rose 0.11% in Asian trading after Wall Street stocks hit new record highs on Tuesday, boosted by positive vaccine news and apparent progress in the US stimulus negotiations.
The Dow Jones Industrial Average rose 0.35% on Tuesday, the S&P 500 gained 0.28% and the Nasdaq Composite added 0.5%.
U.S. policymakers have continued to negotiate additional stimulus measures to help offset the economic impact of the pandemic while pursuing an interim government funding bill.
Leaders on both sides remain adamant that a deal needs to be reached, but are still working on sticking points, including helping state and local governments and protecting corporate liability.
Treasury Secretary Steven Mnuchin presented a new proposal for $ 916 billion in COVID-19 relief to House Speaker Nancy Pelosi, who praised the progress of negotiations although she ruled some parts of the plan as “unacceptable”.
The steady march of positive news about COVID-19 vaccines has helped boost investor morale.
The UK on Tuesday became the first Western country to launch a massive vaccination campaign and Johnson & Johnson said it could get results of late-stage trials for a single-dose vaccine in January, earlier than expected.
Meanwhile, Pfizer Inc broke another hurdle when the US health regulator released documents not reporting any new safety or efficacy issues.
The British pound did not change much before the landmark negotiations on a trade deal between the UK and the European Union.
The looming prospect of a ‘no deal’ Brexit weighed on sentiment for the pound sterling, which last traded at $ 1.3369 and 90.61 pence to the euro.
“While hope is still alive that a new stimulus package for the United States will be agreed soon, it seems less likely that a Brexit deal will be reached with negotiators on both sides acknowledging that a deal could not be concluded, ”ANZ Bank analysts wrote in a research note.
“The next 24 hours will be critical and risk causing market volatility depending on what is agreed or not.”
British Prime Minister Boris Johnson will meet Ursula von der Leyen, President of the EU’s Executive Commission, for a dinner in Brussels on Wednesday to try to fill the loopholes their negotiators have been grappling with for months.
Against a basket of currencies, the dollar sat at 90.923, about half a percent above the two-and-a-half-year low it hit on Friday as short sellers piled in.
Yields on benchmark 10-year US Treasury bonds edged up Wednesday to 0.9344% in Asia. Some dealers say expectations of increased tax spending could drive yields higher in the future. Bond yields rise as their prices fall, indicating that investors are more willing to sell these lower risk assets in favor of riskier assets such as stocks when the economic outlook improves.
In energy markets, Brent futures fell 0.18% to $ 48.75 a barrel, while US West Texas Intermediate futures fell 0.22% to 45, $ 50 following an increase in US crude inventories.
The spot price of gold fell from a two-week high to $ 1,868.21 an ounce as the start of vaccine treatment reduced demand for the precious metal, generally viewed as a safe haven.