© Reuters. FILE PHOTO: A man wearing a face mask, after the outbreak of coronavirus (COVID-19), stands in front of an electrical panel showing the Nikkei (top in C) and other countries’ stock indexes outside a brokerage house in a business district in Tokyo, Japan, Janu
By Alun John
HONG KONG (Reuters) – Asian equities reached a nearly two-week high on Wednesday, prolonging a global relief rally as investors cheered for signs that the Omicron variant of the coronavirus could be less disruptive to the world economy than first feared.
Futures in the US and Nasdaq also rose, rising 0.3% and 0.4% respectively, while pan-Europeans were flat.
“The markets are very sensitive to all the small news related to Omicron, and the absence of bad news is taken very positively by the stock markets, but ̵[ads1]1; and I am not a scientist – it seems too early to signal a clear.” said Stefan Hofer, investment strategist for the private bank LGT in Asia Pacific.
“With each new variant, we go through a period where we wait for a signal from the scientific community, which is difficult for the markets, but that was what we got yesterday.”
MSCI’s broadest index for Asia-Pacific equities outside Japan rose 0.5% to its highest level since November 26, when news of the new variant fell in the markets. rose 1.2 percent.
The gains were broadly based with Korea touching a six-week high. ()
The British drug manufacturer GSK said on Tuesday that the antibody-based COVID-19 treatment with the American partner Vir Biotechnology (NASDAQ 🙂 is effective against all mutations in Omicron.
Also, a South African study on Tuesday suggested that booster doses of the covid-19 vaccine produced by Pfizer Inc. (NYSE 🙂 and partner BioNTech’s may help prevent Omicron infection, although the study showed that the new strain can partially avoid protection from two doses.
These reports contributed to the MSCI World Index for All Countries rising 2.1% on Tuesday, the largest percentage increase since November 2020. Oil also rose above 3%.
Markets are also focused on US inflation data coming in on Friday, with high pressure likely to point decision-makers towards accelerating the downsizing of the Federal Reserve’s massive bond buying program.
“The rise in aid could be quite short-lived if US data on Friday shows that high inflation looks sticky, or persistent – choose a word that is not temporary,” Hofer said.
Last week, Fed Chairman Jerome Powell said it might be time to stop seeing inflation as temporary, suggesting that the central bank may accelerate its slowdown.
On Wednesday, the two-year interest rate, which rises with expectations of higher interest rates, was 0.6872%, close to Tuesday’s almost two-year high of 0.6950%.
The benchmark index was stable at 1.4614% after two days of rising. [US/]
It should support the dollar in the longer term, especially against other currencies with more dove-like central banks.
However, the improved investor sentiment now supports risk assets such as the Australian dollar, which reached a one-week high of $ 0.7435 on Wednesday and recovered from a 13-month low earlier in the week. [FRX/]
strengthened with both onshore and offshore units that have reached their strongest levels against the dollar in more than three and a half years
The euro also gained some ground, and the Canadian dollar remained strong at 1.2637 per US dollar, supported by the rise in overnight oil prices, ahead of a Bank of Canada policy meeting later Wednesday.
Economists expect the Bank of Canada to keep interest rates unchanged at 0.25% at the meeting. Earlier Wednesday, India’s central bank kept its leading lending rate stable.
fell 0.17% to $ 71.93 per barrel. fell 0.11% to $ 75.36 per barrel.
rose 0.3% to $ 1,789 per ounce, within its latest range, and rival inflation hedging, bitcoin was also calm after an exciting weekend, barely changing to $ 50,300.