SYDNEY (Reuters) – Asian stocks hit record highs on Monday as oil topped $ 60 a barrel in hopes of a $ 1.9 trillion COVID-19 aid package to US lawmakers immediately after this month, exactly when coronavirus vaccines are launched globally.
In a sign, the European and American markets would start strong, eurostoxx futures and German DAX each increased by 0.7%, while London FTSE futures added 0.6%. E-mini futures for the S&P 500 rose 0.4% in early Asian transactions.
The mood was optimistic in Asia, with all major indices showing gains.
The broadest MSCI index of Asia-Pacific equities outside Japan rose 0.5% to 721.11, not far from an all-time high of 730.16 at the end of last month.
Japan’s Nikkei jumped about 2%, while Australian shares closed 0.6% higher. Chinese stocks advanced with the CSI300 blue-chip index up 1.3%.
Hopes of a faster economic recovery and supply limits by the OPEC producer group and its allies have pushed oil to its highest level in a year, as it has exceeded $ 60 a barrel. [O/R]
Global stock markets have risen in recent days in hopes of a faster economic recovery, driven by the successful launch of vaccines and expectations of a large US pandemic relief package.
On Friday, the Nasdaq and S&P 500 hit all-time highs on stronger-than-expected fourth-quarter corporate earnings, as companies were on track to see first-quarter earnings growth instead of declining. [.N]
The rallies came even as US data presented an unpleasant picture of the country’s labor market, with wages rising by 49,000, half of what economists expected.
The weak report boosted the momentum for more stimulus, stressing the need for lawmakers to act on President Joe Biden’s $ 1.9 trillion COVID-19 aid package.
Biden and his Democratic allies in Congress advanced their stimulus plan on Friday, while lawmakers approved a budget scheme that will allow them to cope in the coming weeks without Republican support.
U.S. Treasury Secretary Janet Yallen predicted that the United States will achieve full employment next year if Congress can promote its support package.
“This is an important call, given that full employment is 4.1%, but one that will do well in the market at a time when the vaccination program is being launched effectively in several countries.” said Chris Weston, chief strategist at Melbourne Pepperstone.
Expectations of a US economic recovery have not boosted the green dollar, “because this shift in outlook is seen by the market as part of a global recovery,” Westpac economists wrote in a note.
“Therefore, investors favor risk-taking and therefore appreciate the security of the US dollar less.”
Indeed, the dollar fell four-month high against the Japanese yen to last 105.50.
The euro was slightly weaker at $ 1.2036, after rising 0.7% on Friday to a one-week high.
The risk-sensitive Australian dollar fell from a one-week high to $ 0.7675.
In commodities, Brent crude and US crude oil each rose 59 cents to $ 59.93 and $ 0.57.44, respectively.
US gold futures rose 0.1% to $ 1,815.4 an ounce.
Editing by Shri Navaratnam and Jacqueline Wong