Global stocks hit record high as Biden, vaccine lift investor outlook


In this news, we discuss the Global stocks hit record high as Biden, vaccine lift investor outlook.

TOKYO / WASHINGTON (Reuters) – Global stocks hit a record high on Wednesday after an overnight surge that saw the benchmark Dow Jones index cross 30,000 for the first time as investors applauded a dramatic improvement in the global outlook.

The official start of US President-elect Joe Biden’s transition to the White House and growing confidence that a COVID-19 vaccine would soon be ready have ushered in a renewed appetite for global stocks.

After weeks of waiting, President Donald Trump’s administration on Monday cleared the way for Biden to prepare for the start of his administration, giving him access to briefings and funding.

“The bottom line now is that it has become official that the Biden administration is starting. And we have ample liquidity from central banks around the world, ”said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

“I expect that the honeymoon between financial markets and the Biden administration and the uptrend in stocks may continue until his inauguration in January,” he said, while saying waiting for reality checks to follow his swearing-in.

Reports that Biden planned to appoint former Federal Reserve Chairman Janet Yellen as Treasury Secretary – a move that could sharply shift attention to efforts to tackle growing economic inequality – also applauded the markets.

This pushed MSCI’s widest measure of global equities to an all-time high of 0.1%.

In Asia, Japan’s Nikkei rebounded 0.5% to a 29-year high, while the MSCI Asia-Pacific stock index outside Japan ditched early gains to trade down 0 , 2%, as Chinese stocks were capped by concerns about rising defaults.

Euro Stoxx 50 futures on Eurozone stocks changed little at the start of trading.

On Wall Street Tuesday, the Dow Jones Industrial Average rose 1.54% to 30,046.24 while the S&P 500 gained 1.62% to 3,635.41, also a record.

E-mini futures for the S&P 500 added 0.1% on Wednesday.

“The feeling is very hot as we come to the end of a month of cracking down on risky assets, so it makes you wonder if the market is starting to show signs of euphoria, and should do a bit. retracement in the short. term, ”said IG Australia market analyst Kyle Rodda.

“But despite all the risks posed by the pandemic over the next few months … market players seem happy to watch everything and position themselves for a post-pandemic world.”

Investors are betting that the next virus vaccines could ease the pain of various industries that have been hit hardest by the pandemic, from tourism to energy.

Global energy shares have risen nearly 34% so far this month, on track for their best month on record.

In the forex market, risk-sensitive currencies gained the upper hand over safe havens, including the US dollar.

The euro held steady at $ 1.1900, near the top of its recent trading range. The British pound was at $ 1.3346, close to Monday’s two-month high, also supported by hopes of a Brexit deal.

Bitcoin fell 1.4% to trade at $ 18,901, although it is still within sight of its all-time high of $ 19,666 reached almost three years ago.

In contrast, the yen, considered a safe haven currency, was little changed at 104.56 per dollar.

Gold also lost some of its luster, hitting a four-month low of $ 1,800.80 on Tuesday and last trading at $ 1,806.10 an ounce.

U.S. Treasuries have also been squeezed by expectations that Yellen’s appointment as Treasury secretary could facilitate passage of a fiscal stimulus package, which would mean more debt.

The US 10-year yield fell to 0.880%, compared to Thursday’s low of 0.818%.

Oil prices also stayed close to their highest levels since March thanks to improving global economic prospects.

Brent futures rose 0.5% to $ 48.20 a barrel, reaching a last high in early March.

Editing by Sam Holmes

Original © Thomson Reuters

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