(ATF) Hong Kong: Asian markets stayed weak on Tuesday as investors sought clarity on the impact of the new variant of the coronavirus, although analysts have started cautiously upgrading their economic assessments for the current year and for 2021.
“Initial analysis indicates that the variant may spread more readily between people. Investigations are ongoing to determine if this variant is associated with any changes in the severity of symptoms, antibody response or vaccine efficacy,” the World Health Organisation said in a statement.
Japan’s Nikkei 225 index slipped 1.04%, Australia’s S&P ASX 200 retreated 1.05%, Hong Kong’s Hang Seng index fell 0.71% and China’s CSI300 slid 1.63%. Regionally, the MSCI Asia Pacific index tumbled 1.24%.
Safe havens did not attract any significant bids despite the risk-off environment with 10-year US Treasury yields unchanged at 0.94% and the dollar remaining steady at above 90, reflecting some of the cautious optimism.
And with just a week to go before the year-end, analysts are getting increasingly upbeat about the economic rebound and the outlook for the year ahead.
Positive news about various Covid-19 vaccines has boosted investor spirits and spurred a significant rally in equity markets.
“There is, at last, some light at the end of the tunnel. The vaccine should, eventually, bring a return to normal social behaviour and an end to the restrictions which remain in place in many parts of the world,” Keith Wade, Chief Economist and Strategist at Schroders, said.
“Global GDP growth in 2020 has been upgraded to -4.0% from -4.3%, driven by a revision to the emerging markets (from -2.7% to -1.9%) reflecting better growth outside China.”
Oxford Economics strategists have upgraded forecasts for 2021 following these vaccine developments saying they expect the average quarterly GDP growth to be the strongest since 1978, referring to non-US assets.
“We expect very low returns for government bonds in all advanced economies. (And) We see scope for regional rotation into cheaper markets outside of the US. Buffering Emerging Markets are structurally cheap valuations and an acceleration in China’s credit cycle, and we foresee ongoing dollar weakness.”
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· Japan’s Nikkei 225 index slipped 1.04%
· Australia’s S&P ASX 200 retreated 1.05%
· Hong Kong’s Hang Seng index fell 0.71%
· China’s CSI300 slid 1.63%
· The MSCI Asia Pacific index tumbled 1.24%.
Stock of the day
Anta Sports shares rose as much as 6% after it disposed of a unit for $420 million to help accelerate future growth”. The company said in a statement: “The disposal fits well with such strategy by optimising the internal resources of the JV Group”.