SYDNEY (Reuters) – Asian stocks faltered on Monday amid concerns that vaccine launch issues, combined with new COVID-19 strains, will delay a global economic recovery, which has already been implicated in rich market assessments.
The largest MSCI index of Asia-Pacific equities outside Japan fell 0.4% after four consecutive loss sessions. The Japanese Nikkei jumped 0.4% after dropping almost 2% on Friday.
S&P 500 futures lost another 0.7% in heavy trading, while NASDAQ futures fell 0.9%.
Dealers were also eagerly awaiting new developments in the exciting battle between retail investors and short-term equity funds.
U.S. hedge funds have bought and sold most of their stock in more than 10 years amid wild swings from GameStop Corp., according to an analysis by Goldman Sachs Inc.
Monday’s discussion was that silver was the new target for the retail crowd, as the metal rose 5.7% to a six-month high.
However, many analysts see this fun episode as a side show compared to the signs of a loss of momentum in the United States and Europe as the bites blocked by the coronavirus.
Indeed, a survey in China showed on Sunday that the factory’s activity has grown at the slowest pace in the last five months of January, as restrictions have affected some regions.
The news about the vaccine launch was not positive either, especially considering the doubts about whether COVID strains will work on new strains.
“These considerations, not what happens daily to a video game retailer, have influenced risky assets,” said John Briggs, global chief strategy officer at NatWest Markets. “Much of the market assessment, especially risk, is based on the fact that we can see a light at the end of the COVID tunnel.”
Doubts have also arisen about the future of President Joe Biden’s $ 1.9 trillion aid package, with 10 Republican senators demanding a $ 600 billion plan.
The turmoil in equities caused only a brief rise in Treasury yield bonds, which actually rose at the end of last week, perhaps a reversal of the ongoing lending wave.
A record $ 1.11 trillion in gross treasury issues is scheduled for this quarter, up from $ 685 billion in the same period last year.
Early Monday, US 10-year yields remained at 1.07% and close to the last 10 months at 1.187%.
Higher yields combined with a more cautious market position have seen the dollar steadily rise above its recent lows. The dollar index stood at 90,628, after jumping from a 89,206 gutter hit in early January.
The euro rose to $ 1.2121, surpassing its last high of $ 1.2349, while the dollar remained firm at 104.74 yen.
Gold followed higher silver to $ 1,853 an ounce, but repeatedly stopped at resistance around $ 1,875. [GOL/]
Concerns about global demand have kept oil prices under control. American crude oil fell 30 cents to $ 51.90 a barrel, while in the future Brent crude oil fell 20 cents to $ 54.84 a barrel. [O/R]
Edited by Shri Navaratnam