Investors will assess whether the vaccine-aided global economic recovery will be hampered by a new strain of the virus.
Asian stocks edged higher on Thursday and were expected to end a tumultuous 2020 at record highs, as growing investor hopes of a global economic recovery pushed the dollar further against most major currencies.
The MSCI indicator of Asia-Pacific stocks excluding Japan rose 0.1% to its latest high, after exploring new highs several times at the end of the year. But year-end trading was generally limited with many investors on vacation.
The index is set for a fourth quarter gain of more than 19%, which would be its best three-month performance since 2009 and an annual increase of just under 20%, which would be its highest since 2017.
“Much of the rise in the second half of the quarter is due to political risk evaporating,” said Kerry Craig, Global Market Strategist, JP Morgan Asset Management, citing the US election, hoping for an appeasement. trade tensions between the United States and China. the Brexit deal.
Clouds on the horizon?
Turning to 2021, Craig said investors are trying to balance the potential for rising inflation with a likely economic recovery and assess whether that rebound could be hampered early in the year by new strains of inflation. COVID-19 and the struggles of vaccine distribution.
Chinese blue chips rose 1.45% on Thursday after official data showed activity in China’s service sector and factories increased in December, although both at a slower pace than the month previous. Hong Kong’s benchmark index also rose 0.26%.
Australian stocks fell 0.80% after tighter restrictions on movement were announced in a bid to cancel new cases of COVID-19.
The markets in Japan and South Korea are on vacation.
Futures contracts on E-Mini S&P rose 0.10%.
The optimistic mood, reflected in overnight gains on Wall Street, caused the “safe haven” dollar to fall and supported nearly every other major world currencies.
The dollar fell against a basket of currencies, falling 0.074% to 89.528, after hitting its lowest level since April 2018.
Drop of oil
Oil prices have resisted the trend, however, pulling back a bit as swelling crude supplies led some traders to view any future economic recovery as gradual rather than rapid.
U.S. West Texas Intermediate crude fell 0.23% to trade at $ 48.29 a barrel, well below around $ 62 at the start of 2020 and Brent was trading down 25 cents, or 0, 5%, to $ 51.38.
Global crude oil markets lost about a fifth of their value in 2020 as strict coronavirus lockdowns crippled economic activity and travel, but prices rebounded sharply from their lows as governments rolled out stimulus measures.
Gold fell 0.14% to $ 1.89.62 an ounce. The precious metal has risen more than 24% this year, its best year since 2010 as investors turned to safe-haven stocks and the dollar waned.
T-bills were little changed, with US 10-year benchmark yields at 0.9264% and two-year at 0.1250%.