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World Asian markets mixed as inflation fears play against recovery hopes

07:01  18 february  2021
07:01  18 february  2021 Source:   afp.com

Global stocks rise as investors bet on a swift push by Democrats to pass Biden's stimulus plan

  Global stocks rise as investors bet on a swift push by Democrats to pass Biden's stimulus plan Global stocks gained on Wednesday as investors focused on Democratic efforts to agree on US stimulus. The "'buy everything' trade still has the upper hand and FOMO hasn't gone," a market analyst said.Aiming to get the plan to a floor vote by the end of February, Democrats on Tuesday released draft legislation to maintain the income limit for stimulus checks at $US75,000 for individual taxpayers and $US150,000 for married couples.

Asian shares were mixed on Monday as investors eyeballed surging coronavirus cases in the region. U.S. Secretary of State Mike Pompeo’s weekend comments that President Donald Trump plans to take action on a what he sees as a broad array of national security risks presented by software connected to the Chinese Communist “Between the increased growth concerns and the big tech surprises from Wall Street last week, Asia markets are set for mixed movements into Monday morning,” said Jingyi Pan, market strategist at IG in Singapore, referring to the U.S. rally that closed last week’s trading.

Hopes are high for a recovery for Japan, coming in the latter part of this year, especially if the Tokyo Olympics are held as scheduled in July, although the growth pace will slow next year and the year after that, Yoshimasa Maruyama, senior economist for SMBC Nikko Securities, said in a report. On Wall Street, indexes closed mostly lower Tuesday as losses in health care and technology companies kept gains in energy and other sectors of the market in check. Rising bond yields, a sign of confidence in the economic outlook and expectations of rising inflation , are weighing on sentiment, analysts said.

Asian markets were mixed Thursday on profit-taking and growing worries about inflation, which offset long-running optimism about the global recovery as vaccines are rolled out, infection rates slow and Joe Biden's stimulus winds through Congress.

a close up of a person wearing a costume: The global vaccine rollout and falling infection rates has helped propel markets higher for months but there are growing concerns equity valuations may be too high © Frederic J. BROWN The global vaccine rollout and falling infection rates has helped propel markets higher for months but there are growing concerns equity valuations may be too high

Oil prices pushed further up to 13-month highs as the severe cold snap in the United States hammers production, even trumping news that Saudi Arabia is planning to up output in light of the commodity's strong performance in recent months.

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Asian markets pointed to a mixed open on Wednesday, as investors juggle the prospects for an economic comeback and additional stimulus with continued pandemic concerns. The expectation that U.S. policymakers will stick with significant fiscal and monetary stimulus helped drive stocks higher and spur a sell-off in bonds. " As inflation expectations rise, investors are looking to reduce their exposure to fixed income in favour of investments which will rise with any wave of inflation ."

Asian markets were mixed in early trading Wednesday, after the S&P 500 closed at a new record about five months after massive losses caused by coronavirus The lightning recovery is even more noteworthy considering prevailing uncertainties. Millions of Americans are relying on unemployment benefits, and businesses across the country are still shutting their doors. COVID-19 continues to spread throughout the world, with more than 5.4 million known cases and 170,000 deaths in the United States alone.

Confidence that the world economy will enjoy a scorching rebound from last year's collapse has fired global equities and other risk assets for months as immunisation programmes allow people to slowly get back to a semblance of normality as lockdowns are eased.

Underpinning that has been vast amounts of government spending as well as ultra-loose central bank monetary policies and pledges of continued support until the recovery well underway.

But that has led to expectations of a surge in inflation and a spike in US Treasury yields to around one-year highs, sparking worries of higher borrowing costs down the line.

And it is these fears, along with warnings equities may have run ahead of themselves, that are playing on investors' minds.

Asian shares hit all-time highs, oil buoyant

  Asian shares hit all-time highs, oil buoyant Asian shares hit all-time highs, oil buoyantSYDNEY (Reuters) - Asian shares advanced to record highs on Monday and oil rose to a more than one year peak as successful coronavirus vaccine rollouts globally raise hopes of a rapid economic recovery amid new fiscal aid from Washington.

Asian markets pointed to a mixed open on Wednesday, as investors juggle the prospects for an economic comeback and additional stimulus with continued pandemic concerns. The expectation that U.S. policymakers will stick with significant fiscal and monetary stimulus helped drive stocks higher and spur a sell-off in bonds. " As inflation expectations rise, investors are looking to reduce their exposure to fixed income in favour of investments which will rise with any wave of inflation ."

Asian share markets turned mixed on Wednesday as investor nerves were strained ahead of a US inflation report that could soothe, or inflame, fears of faster rate hikes globally. Other Asian markets were steadier, as were E-Minis for the S&P 500. MSCI's broadest index of Asia -Pacific shares outside Japan added 0.4 per cent. Moves were tentative with investors clearly scarred by the return of volatility. BofA Merrill Lynch's February Fund Manager Survey found a record one-month jump in the net percentage of investors taking out protection against a sharp fall in equity markets .

Those concerns were now allayed by a forecast-beating jump in US retail sales last month and wholesale inflation climbed at its fastest pace since the index was revamped in December 2009.

"Strong US economic data dampened the argument that the economy still needs massive stimulus and as rising inflation expectations start to weigh on valuations," said OANDA strategist Edward Moya.

"Technology stocks are leading the decline as pricing pressures will likely have the biggest impact on their bottom line. The skyrocketing move in yields is triggering some investors to take off some of their most profitable frothy trades."

- Crude extends gains -

Still, observers said the surprise jump would be unlikely to shift the Federal Reserve from its course as the economy continues to be threatened by the pandemic and is "far from" achieving growth and employment goals.

Stocks extend bull run on hopes of quick economic recovery

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Recovery hopes saw global stocks hit all-time highs on Wednesday, but European and US stocks dipped ahead of a speech by US Federal Reserve chair Jerome Powell. MSCI’s global and Asian stock indices hit new highs on Wednesday, while US stocks also opened at record highs. With the Democrats seemingly intent on rolling the stimulus package through mostly unchanged, over Republican objections, as a higher print then 1.60% for the core inflation number, tonight could see inflation fears make a temporary return.” WATCH: Trump impeachment trial approved by US Senate.

Asian equities were mixed Tuesday as long-running optimism over the reopening of economies was offset by profit-taking following a week-long rally across markets . Sydney and Hong Kong were the standout performers, with traders picking up the baton from Wall Street where the Nasdaq ended at a record high and the S&P 500 wiped out all its losses for the year. In early trade, Hong Kong was up more than one percent, while Sydney jumped more than two percent as investors there returned from an extended weekend break to play catch-up with Monday's regional advance.

While the Dow edged to another record high, the S&P 500 and Nasdaq both dipped.

Asian markets swung through the morning. Tokyo, Sydney, Taipei and Jakarta were all up while Shanghai put on one percent as it reopened after the week-long Lunar New Year break.

But Hong Kong, Singapore, Seoul, Wellington and Manila were all in the red.


Video: Treasury yields rise, adding to fears of potential inflation (CNBC)

Stephen Innes at Axi said while rising yields and price concerns remained, "improving Covid-19 trends and robust economic data allow investors to turn their attention to updates on reopening timelines -- especially from the UK and the US as cries for a quicker end to mobility restrictions grow more vocal".

Oil prices rallied more than one percent as economic reopening optimism is mixed with news that the US cold snap had hammered output, with Bloomberg News reporting 40 percent of the nation's production had been hit.

The US troubles overshadowed Riyadh's decision to ease production cuts within the next few months.

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"I don't think the markets were overly shocked about the Saudi rollback amid the roaring recovery in global demand, good news on the Covid-19 vaccine roll-out, and the extremely healthy oil price," Innes added.

Bitcoin tapped another record of $52,631, just days after breaking $50,000.

- Key figures around 0300 GMT -

Tokyo - Nikkei 225: UP 0.2 percent at 30,344.97 (break)

Hong Kong - Hang Seng: DOWN 0.6 percent at 30,915.45

Shanghai - Composite: UP 1.0 percent at 3,692.57

Euro/dollar: DOWN at $1.2043 from $1.2043 at 2230 GMT

Pound/dollar: DOWN at $1.3858 from $1.3858

Euro/pound: DOWN at 86.87 pence from 86.87 pence

Dollar/yen: DOWN at 105.86 yen from 105.86 yen

Brent North Sea crude: UP 1.6 percent at $65.34 per barrel

West Texas Intermediate: UP 1.3 percent at $61.95 per barrel

New York - Dow: UP 0.3 percent at 31,613.02 (close)

London - FTSE 100: DOWN 0.6 percent at 6,710.90 (close)

dan/fox

Asia markets tumble as rate hike fears take hold .
Equity markets suffered another sell-off Friday on fears that an expected strong global economic recovery this year will fan inflation and force central banks to hike interest rates, despite reassurances that ultra-loose monetary policies will be kept in place for as long as needed. The selling comes despite constant reassurances from Federal Reserve officials, led by boss Jerome Powell, that they are not worried about inflation and the rise in Treasury yields is a sign that the economic outlook is bright -- and rates will not rise for the foreseeable future.

usr: 2
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