SYDNEY (Reuters) – Asian stocks rose to near a record high on Monday due to concerns about rising COVID-19 cases and delays in vaccine supply, which have been overshadowed by optimism over a fiscal stimulus plan of 1, $ 9 trillion to help revive the US economy.
Sentiment in the region was also boosted by a report that China has overtaken the United States to be the largest beneficiary of foreign direct investment in 2020, with revenues of $ 163 billion.
Futures markets also showed stronger launches elsewhere. E-mini futures for the S&P 500 rose 0.37%, eurostoxx 50 futures and London’s FTSE rose 0.3% each, while Germany’s DAX added 0.4%.
“The story of FDI has certainly lifted China and its neighbors today, blowing an economic recovery in adjacent geographic markets,” said Jeffery Halley, OANDA’s Singapore market analyst.
“Looking ahead, the actions will find more significant reactions to the progress or not of the Biden stimulus package and the level of corruption displayed by the Federal Reserve at this week’s FOMC meeting.”
Global stock markets have hit record levels in recent days on betting COVID-19 vaccines will begin to reduce global infection rates and a stronger US economic recovery under President Joe Biden.
However, investors are also wary of bankruptcy assessments amid questions about the effectiveness of vaccines in fighting the pandemic and as US lawmakers continue to debate a coronavirus aid package.
The broadest MSCI index of Asia-Pacific equities outside of Japan rose to 726.46, a kissing distance from last week’s record of 727.31.
The reference value has increased by almost 9% so far in January, on the path of the fourth consecutive monthly increase.
The Japanese Nikkei returned due to declines in early trading to increase by 0.7%.
Australian shares added 0.4% after the country’s drug regulator approved the Pfizer / BioNTech COVID-19 vaccine, with a phased launch likely late next month.
Chinese equities rose, with the CSI300 blue-chip index rising 1.1%. Hong Kong’s Hang Seng Index rose nearly 2%, driven by technology stocks.
All eyes are on Washington DC, while US lawmakers have agreed that receiving the COVID-19 vaccine from Americans should be a priority even if it blocks horns beyond the size of the US pandemic relief package.
Financial markets have seen a massive package, although disagreements have meant months of indecision in a country that suffers from more than 175,000 COVID-19 cases a day, with millions of jobs.
Global COVID-19 cases are approaching 100 million, with over 2 million dead.
Hong Kong closed an area of the Kowloon Peninsula on Saturday, the first such measure the city has taken since the pandemic began.
Reports about the new UK variant COVID was not only extremely infectious, but perhaps more deadly than the original strain added to the concerns.
In the European Union, political leaders have expressed widespread concern about the suspension by AstraZeneca and Pfizer Inc of delivering the promised doses, with the Italian prime minister attacking vaccine suppliers, saying the delays had resulted in 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 for the week, with the Nasdaq rising by more than 4%.
Jefferies analysts said US stock markets looked overvalued, although they continued to rise.
“For the stock market to have real ugly relaxation, rather than just a bull market correction, there needs to be a catalyst,” said analyst Christopher Wood.
“That means either an economic recession or a material tightening of Fed policy,” Wood said, adding that none of these will happen in a hurry.
In the currency, major pairs were caught in a tight range as markets awaited Wednesday’s Fed meeting.
The dollar index fell to 90.073, with the euro at $ 1.2181, while the pound was slightly firmer at $ 1.3721.
The Japanese yen was a weaker shade, at 103.69 per dollar.
In commodities, Brent gave up early losses to be the last flat at $ 55.41 a barrel, and American crude rose 3 cents to $ 52.30.
Gold was flat at $ 1,852.9 an ounce.
Editing by Shri Navaratnam and Jacqueline Wong