SYDNEY (Reuters) – Asian shares rose Monday as concerns about COVID-19 cases rose and delays in vaccine supply downplayed in anticipation of a $ 1.9 trillion fiscal stimulus plan to help revive the U.S. economy .
Global equity markets have reached higher levels in recent days on bet COVID vaccines will begin to reduce global admission rates and a stronger U.S. economic recovery under President Joe Biden.
However, investors are also wary of high ratings amid questions about the effectiveness of vaccines in preventing the pandemic and how USlawmakers continue to debate the coronavirus aid package.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose slightly to 721.96 and just a short distance from last week’s record high of 727.31.
The benchmark is up 8.5% so far in January, on track for its fourth straight monthly rise.
Japan’s Nikkei rebounded from falls in early trading to be up 0.36%.
Australian shares were also slightly higher after the country’s drug regulator approved the Pfizer / BioNTech COVID-19 vaccine with authorities saying a phased release would begin late next month.
Chinese shares rose, with the CSI300 blue-chip index up 0.6%.
“The focus will be on Washington DC this week,” said Stephen Innes, Axi’s Chief Global Markets Strategy.
The Biden administration sought to allay Republican concerns that their $ 1.9 trillion pandemic relief proposal was too expensive with lawyers from both parties saying they had agreed that the COVID-19 vaccine should be given to ‘Americans.
Financial markets have been monitoring the major U.S. economic stimulus despite disagreements that have meant months of uncertainty in a country that suffers more than 175,000 COVID-19 cases per day with millions out of work.
“A vaccine outbreak is likely to lead to a more active life again at some point in 2021, leading to higher GDP growth and stronger physical employment,” said Innes.
“But with increasing global COVID19 infections, new strains of the virus, tightening social distance restrictions and delays in vaccine distribution in some areas, they all increase near-term growth risks.”
Global cases of COVID-19 are approaching 100 million with over 2 million dead.
Hong Kong locked up an area of the Kowloon peninsula on Saturday, the first such step the city has taken since the outbreak began.
Reports of the new UK variant of COVID are not only highly contagious but perhaps more deadly than the original species also add to concerns.
In the European Union, political leaders have expressed their displeasure at holding AstraZeneca and Pfizer Inc in delivering on promised doses, with the Italian Prime Minister losing out at vaccine providers, saying delays were a significant breach of contractual obligations.
On Friday, the Dow fell 0.57%, the S&P 500 lost 0.30% and the Nasdaq added 0.09%. All three major U.S. indices closed higher for the week, with the Nasdaq up more than 4%.
Jefferies analysts said U.S. stock markets looked overvalued while still bullish.
“For the stock market to have a bad market, instead of just a bull market correction, there has to be a catapult,” said analyst Christopher Wood.
“That means either an economic downturn or a substantial tightening of Fed policy,” Wood said, adding that it was unlikely to happen in a hurry.
In currencies, major pairs were caught in a tight range as markets awaited the U.S. Federal Reserve meeting on Wednesday.
The dollar index was flat at 90.19, with the euro at $ 1.2169, while sterling last traded at $ 1.3691.
The Japanese yen remained unchanged at 103.77 per dollar.
In commodity, oil prices with Brent fell 12 cents at $ 55.29 a barrel and US crude fell 3 cents at $ 52.24.
Gold was higher with spot prices up 0.2% at 1,855.9 ounces.
Edited by Sam Holmes & Shri Navaratnam