HONG KONG – Asian markets bounded higher again today after Wall Street got back to record-breaking ways, with investors growing increasingly optimistic about the economic outlook as vaccines are rolled out and coronavirus rates slow.
Expectations that US President Joe Biden will be able to push through his stimulus for the economy also boosted confidence and helped equities put last week’s rout firmly in the rearview mirror.
Data showing US unemployment claims had fallen to their lowest level since November added to the positive energy, following a forecast-beating jobs creation reading Wednesday and ahead of a key non-farm payrolls report later in the day.
There was also relief on trading floors that the social media-fuelled buying frenzy that rattled markets last week had subsided.
While virus infections and deaths remain high, investors are hopeful that a slowdown in rates, combined with improved immunisation programmes – more people have now had a jab than have been sick – and the authorisation of more vaccines will soon allow governments to begin easing containment measures.
“While new variants continue to emerge, we are beginning to see real evidence of the vaccine impact on hospitalisation rates and fatalities,” said Lewis Grant at fund manager Federated Hermes.
“As long as the former does not interfere with the latter, the light at the end of the tunnel must edge closer.”
All three main indexes on Wall Street ended more than 1% higher, with the Nasdaq and S&P 500 hitting new records, and Asia extended the rally.
Tokyo, Sydney, Seoul and Manila all climbed more than 1%, while Hong Kong, Mumbai, Taipei, Bangkok and Singapore were also well into positive territory. But Shanghai failed to maintain early momentum and ended slightly lower.
London, Paris and Frankfurt all rose at the open.
However, there remains some concern that markets could see some consolidation after a months-long rally, with some observers warning of a correction owing to frothy valuations.
In Hong Kong, Chinese short-video app company Kuaishou – a major rival to TikTok – nearly tripled on its market debut following a US$5.4 billion initial public offering that was the biggest for an internet firm since Uber’s May 2019 listing.
Oil prices continued their march upwards to 13-month highs thanks to bets on a surge in demand as people return to their normal lives. WTI is now up more than 8% in the past week and Brent has climbed more than 6%. – AFP, February 5, 2021
