International markets rose largely as the first major trading day of 2021 began, with hopes of continued government stimulus, a weaker dollar and the spread of coronavirus vaccines going well for equities.
Most stock benchmarks in the Asia-Pacific region have improved. South Korea’s Kospi Composite gained gains, closing 2.5% higher, while gases rose in Australia, Hong Kong, mainland China and Taiwan as well.
Japan’s Nikkei 225 has lagged behind its peers, and the yen has strengthened, after Prime Minister Yoshihide Suga said it could declare a state of emergency in Tokyo and surrounding areas as new coronavirus infections continue to rise .
U.S. stock futures entered higher after key U.S. benchmark criteria set on the last day of 2020.
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Ben Luk, chief multiasset strategist at State Street Global Markets, said Tuesday’s runoff elections in Georgia are one key focus for investors. The vote, which will decide which party controls the U.S. Senate, has an impact on corporation tax rates and for future economic relief packages. “That is the first threat to markets,” for 2021, he said.
Major futures prices rose, with Brent crude, the global oil benchmark, adding 1.3% to $ 52.45 a barrel, and gold gaining 1.7% to $ 1,927. The dollar weakened, with the WSJ Dollar index down 0.3% to 84.76, and the Chinese Yuan rally to 6.46 per dollar.
Paul Sandhu, head of multiasset size solutions for the Asia-Pacific region at BNP Paribas Asset Management, said he expected the dollar to continue to weaken, under pressure to some extent with a potential increase in U.S. spending on infrastructure and other potential stimulus measures.
Mr Sandhu said markets in Asia had largely picked up where they left off in 2020, as investors continue to favor more risky assets as equities in emerging markets such as China, South Korea and Taiwan. He said he expected Asia to be one of the strongest segments of global markets, thanks in part to its success in introducing the coronavirus.
Bitcoin, the most popular cryptocurrency, paid for some of the benefits it recorded during the New Year holidays. It rose from less than $ 29,000 on New Year’s Eve to a high of more than $ 34,500 on January 3, according to CoinDesk data. On Monday afternoon in Hong Kong, he found about $ 32,900.
“Investors across the globe are looking for new asset classes to invest in and bitcoin looks very attractive because it is an unrelated asset class,” Mr Sandhu said.
China Composite gained nearly 1%, even after a private survey showed that China’s manufacturing activity modeled in December due to weak demand for the country’s exports.
Mr Luk said at State Street that the data indicated continued fragility in the Chinese economy. But he said that helped alleviate concerns that China’s central bank would work prematurely to tighten monetary policy, and instead suggested it would take a more cautious stance.
Write to Joanne Chiu at [email protected]
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