Categories: BusinessLatest

Asian Shares Hit All-time Highs, Oil Rises on Middle East Tensions

Asian shares advanced to record highs on Monday as successful coronavirus vaccine rollouts globally raise hopes of a rapid economic recovery amid new fiscal aid from Washington, while oil prices rose on heightened tensions in the Middle East.

MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 0.4% to 736.4.

Japan’s Nikkei climbed 1.1%, despite data showing the country’s recovery from its worst postwar recession slowed in the fourth quarter.

Australia’s benchmark index added 0.9% while E-mini futures for the S&P 500 were up 0.3% in early Asian trading.

China and Hong Kong markets are shut for the Lunar New Year holiday. U.S. stock markets will be closed on Monday for the Presidents Day holiday.

The highlight of the week will probably be minutes of the U.S. Federal Reserve’s January meeting, where policymakers decided to leave rates unchanged.

Data on inflation is due from the UK, Canada and Japan while Friday will see major economies including the United States release the preliminary February purchasing managers’ indices (PMI).

While economists expect inflation to stay benign for some while yet, the so-called “reflation trade” has gathered steam in recent days largely led by coronavirus vaccines and hopes of massive fiscal spending under U.S. President Joe Biden.

Biden pushed for the first major legislative achievement of his term, turning to a bipartisan group of local officials for help on his $1.9 trillion coronavirus relief plan.

“In our view, as long as the rise (in inflation) is gradual, equity markets can continue to do well. However, unruly moves would certainly hurt investor sentiment,” said Esty Dwek, head of global market strategy, Natixis Investment Managers Solutions.

“Credit spreads have tightened sharply already, but they still have room to absorb some higher yields, making us more comfortable with credit risk than interest rate risk,” Dwek added.

“Commodities would be beneficiaries of an inflationary cycle, but they can still continue to recover without high core inflation as economies reopen and demand picks up.”

Oil prices climbed to the highest since January 2020 on hopes U.S. stimulus will boost the economy and fuel demand.

Prices were also buoyant after a Saudi-led coalition fighting in Yemen said it intercepted an explosive-laden drone fired by the Iran-aligned Houthi group, raising fears of fresh Middle East tensions. [O/R]

Brent crude rose $1 to $63.43 a barrel. U.S. crude oil gained $1.2 to $60.7.

On Friday, the S&P 500 and Nasdaq set record closing highs. The Dow finished 0.1% higher at 31,458.4 points, the S&P 500 gained 0.5% to 3,934.83 and the Nasdaq added 0.5% to 14,095.47. [.N]

Action in currencies was muted.

The dollar was slightly higher against the Japanese yen at 105.01 while the euro rose to $1.2125 and the British pound was up 0.3% at $1.3886. The risk sensitive Australian and New Zealand dollars climbed 0.1% each.

That left the dollar index steady at 90.426.

Bitcoin was barely changed in early Asian trading at $47,994, below a record high of $49,714.66. It posted gains of roughly 20% in a milestone week marked by the endorsement of major firms such as Elon Musk’s Tesla.

Follow us on:

AriseNews

Recent Posts

Voting Begins in US Presidential Election As Trump And Harris Face Off

Americans are headed to the polls to choose the next president in a tightly contested…

21 mins ago

Court Dismisses Case Against Protesters Charged Over Protests, Releases Minors Charged With Treason

An Abuja court has struck out the case against #EndBadGovernance protesters as the AGF discontinued…

2 hours ago

Britain Detects Two Additional Cases Of New Mpox Variant, Total Reaches Three

The UK has confirmed two more cases of the new mpox variant, clade Ib

2 hours ago

Ekiti Chief Judge Oyewole Adeyeye Passes Away From Injuries Sustained In Court Building Collapse

Ekiti mourns as Chief Judge Justice Adeyeye dies, succumbing to injuries from a court building…

3 hours ago

Boeing Workers End Seven-Week Strike After Accepting 38% Pay Increase

Boeing workers have accepted a new contract with a 38% raise, ending a seven-week strike…

3 hours ago

Trial Underway for Eight People Accused of Inciting Murder of Teacher Samuel Paty

Eight individuals are on trial in Paris, accused of inciting the murder of teacher Samuel…

3 hours ago