Asian markets retreat from record highs achieved thanks to Biden’s stimulus proposal

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In this news, we discuss the Asian markets retreat from record highs achieved thanks to Biden’s stimulus proposal

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SYDNEY (Reuters) – Asian stocks slipped on Friday as investors took profits after a recent rally driven by hopes of a US economic recovery by new President Joe Biden.

Sentiment was also touched by concerns about new coronavirus restrictions in China, which reported 103 cases of COVID-19 on Friday.

Futures were a bleak start for European and US equity markets. Eurostoxx 50 futures fell 0.4% while futures on the German Dax index slipped 0.3% and those on London’s FTSE fell 0.2%. E-Mini futures for the S&P 500 stumbled 0.25%.

The MSCI’s largest Asia-Pacific stock index outside of Japan extended its losses in afternoon trading to last 0.6% to 720.17 points after three consecutive sessions of gains.

The index is so far up 8.8% in January, after hitting an all-time high of 727.31 on Thursday.

Analysts expect Friday’s losses to be short-lived as they forecast a strong rebound in global growth supported by historically low interest rates around the world.

“2021 begins with expectations of reopening in the second half of the year as the key macroeconomic theme and consensus forecast projects a V-shaped recovery in global growth and corporate earnings,” Paul O’Connor, who leads the multi-team -actives based in the UK at Janus Henderson.

“Although many countries and sectors will bear the scars of the COVID-19 shock for years to come, 2021 is expected to see decisive steps on the road to recovery as restrictions on economic activity ease as the The year goes on, unblocking the repressed consumer. expenses, ”added O’Connor.

The MSCI Asia Ex-Japan Index has jumped 3.7% so far this week, reflecting relief from an orderly transition of power in the United States and strong expectations that U.S. stimulus will continue to support global assets.

Republicans in the U.S. Congress have indicated they are willing to work with President Joe Biden on his administration’s top priority, a $ 1.9 trillion U.S. fiscal stimulus package, though some are opposed to the price.

Democrats took control of the US Senate on Wednesday, though they still need Republican support to pass the program.

The Australian benchmark index fell 0.3% while Japan’s Nikkei fell 0.4%.

Chinese stocks started on the background with the blue chip CSI300 index falling 0.3% and the Hong Kong Hang Seng falling 1.4%.

Travel plans were in limbo for tens of millions of people in cities across northern China that have been under some sort of lockdown amid fears that undetected coronavirus infections could spread quickly over the holidays of the Lunar New Year, which is only a few weeks away.

Overnight on Wall Street, the S&P 500 and Nasdaq Composite closed at record highs. [.N]

In currency markets, the US dollar paused after three consecutive days of losses, although it is still down 0.7% so far this week.

Against the Japanese yen, the dollar has fallen 0.28% so far this week.

The commodity-sensitive Australian dollar is up 0.6% this week while the euro is up 0.8% over the period.

The recent decline in the greenback was led by investors investing money in higher yielding currencies, optimistic about a rapid economic recovery led by a massive US stimulus.

Popular e-money bitcoin fell to its lowest level in nearly three weeks on Friday amid profit taking and concerns over additional regulations.

He’s on track for his worst weekly performance since early 2020, down 12.3% so far.

In the commodities sector, oil prices have been weighed down by fears that new pandemic restrictions in China will reduce fuel demand from the world’s largest oil importer. [O/R]

Brent and US crude were each 73 cents lower at $ 55.37 and $ 52.40 a barrel respectively.

Spot gold was down 0.6% to 1,859.4 an ounce.

Reporting by Swati Pandey in Sydney and Jessica DiNapoli in New York; Edited by Shri Navaratnam and Simon Cameron-Moore

Original © Thomson Reuters

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