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Market looks past Trump fuss, virus strains

(ATF) Hong Kong: Asian markets climbed on the confidence that vaccine rollouts and stimulus programmes across the world would fire up the global economy – looking past US President Donald Trump’s objections to Congress’ latest coronavirus relief bill.

Investor confidence was also fuelled by a sense that Britain and the European Union were close to a free-trade deal, which pushed the sterling to near two-year highs. 

Japan’s Nikkei 225 index advanced 0.54%, Australia’s S&P ASX 200 added 0.33%, Hong Kong’s Hang Seng index inched up 0.16% but China’s CSI300 edged down 0.14%. Regionally, The MSCI Asia Pacific index rose 0.46%.

“Risk-on sentiment is guiding markets so far today and it appears to be weighted more toward possible optimism toward a Brexit deal and the cherry-picked parts of US releases, rather than Trump’s reckless antics over signing the stimulus and funding bill as well as the weaker parts of the US macro releases,” Derek Holt, Vice-President of Scotiabank Economics, said.

The British pound rose to 0.6% to $1.3586, a near 2-year peak and the US dollar dipped 0.2% to 90.3 against a basket of currencies. US Treasuries were steady with the 10-year yield unchanged at 0.94%.

But trade was thin and even though there were reports of mutating virus strains, investors remain confident about the outlook.

“The advice here remains to stick with the ‘back to normal’ trade despite the scare over the mutating virus in Britain which flustered markets earlier this week,” said Jefferies strategist Christopher Wood, author of the weekly report GREED & fear. 

“To state the obvious, viruses mutate all the time and, so far as GREED & fear can tell, there is no concrete evidence as yet that this new version is more dangerous or that it will render the vaccines ineffective. Meanwhile the vaccine rollout continues.”

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Asia Stocks

· Japan’s Nikkei 225 index advanced 0.54%

· Australia’s S&P ASX 200 added 0.33% 

· Hong Kong’s Hang Seng index inched up 0.16%

· China’s CSI300 edged down 0.14%

· The MSCI Asia Pacific index rose 0.46%.

Stock of the day

E-commerce giant Alibaba’s shares plunged as much as 8.9% after China’s market regulator announced it had launched an anti-monopoly investigation into whether the group has engaged in monopolistic behaviour. It resulted in nearly US$60 billion of market capitalisation being erased.

Umesh Desai

Umesh Desai is the Executive Editor at Asia Financial. Prior to this he spent over two decades with Reuters News as Asia Pacific Chief Correspondent in Hong Kong and Bureau Chief in Bombay. Before becoming a journalist Umesh was a credit ratings analyst with Moody's arm in India - ICRA. A chartered accountant by training, Umesh began his career as an equity analyst. His Twitter handle is @umesh_desai


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