SYDNEY: Asian shares were defended on Monday (January 25) as rising cases of COVID-19 and doubts about the ability of vaccine manufacturers to deliver the promised doses on risk appetite over time.
MSCI’s broadest index of Asia-Pacific shares outside Japan barely changed at 718.72.
The benchmark is lower than the high of 727.31 talked about last week but up 8.5 percent so far in January, on track for its fourth straight monthly increase.
Japan’s Nikkei fell 0.1 percent.
Australian shares were 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.
Global COVID-19 cases are approaching 100 million with over 2 million dead, although financial markets have been thriving with vaccine optimism and rapid economic recovery.
However, “one COVID-19 news story was negative after another on Friday and equity investors could not ultimately ignore it,” said Ray Attrill, head of forex strategy at the National Bank of Australia.
Hong Kong locked up an area of the Kowloon peninsula on Saturday, the first such step the city has taken since the pandemic began while some countries including Mexico recorded the case numbers maximum daily.
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.
Pfizer said last week that it was slowing down supply to Europe to make manufacturing changes that would increase production. On Friday, AstraZeneca said initial deliveries to the region will fall short due to a production shift.
Investors saw little hope in the United States after lawyers agreed Sunday that the most important priority should be the effective production and distribution of vaccines.
Democrats and Republicans are debating about US $ 1.9 trillion in U.S. coronavirus relief.
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.
On Friday, the Dow fell 0.57 percent, the S&P 500 lost 0.30 percent and the Nasdaq Composite added 0.09 percent. All three major U.S. indices closed higher for the week, with the Nasdaq up more than 4 percent.
Jefferies analysts said U.S. stock markets looked overvalued while still bullish.
“For the stock market to have a really bad solution, instead of just a bull market correction, there has to be a catalyst,” said analyst Christopher Wood.
“That means either an economic downturn or a material tightening in Fed policy,” Wood said, adding that it was unlikely to happen in a hurry.
In currencies, major pairs were caught in a field as markets awaited Wednesday’s U.S. Federal Reserve meeting.
The dollar index was flat at 90.21, with the euro at US $ 1.2169, while sterling last traded at US $ 1.3683.
The Japanese yen remained unchanged at 103.77 per dollar.
Due to risk sentiment, Treasury yields moved lower Friday ahead of some higher bond ropes and the Fed meeting.
In commodities, Brent oil prices fell 7 cents at US $ 55.34 a barrel and US crude off 5 cents at US $ 52.22.
Gold was higher with spot prices up 0.2 percent at 1,855.9 an ounce.