Asian stocks rebound on US stimulus and vaccine hopes

TOKYO / NEW YORK (Reuters) – Asian stocks rose on Wednesday after a strong Wall Street advance fueled by hopes of further economic stimulus in the United States and a coronavirus vaccine, but trade was unstable while some investors recorded profits.

Senior U.S. Senate Republican Mitch McConnell on Tuesday said Congress should include a new coronavirus stimulus in a $ 1.4 trillion spending bill aimed at avoiding government shutdown amid the pandemic .

US President-elect Joe Biden told the New York Times his priority is to secure a generous aid package through Congress even before he takes office in January.

Senior U.S. health officials, meanwhile, have announced plans to start vaccinating Americans against the coronavirus as early as mid-December once regulatory approvals are in place, as deaths across the country hit the count. the highest for a single day in six months.

The largest MSCI index for Asia-Pacific stocks outside of Japan rose 0.27%, but was still trading below the all-time high from last week. Australian stocks rose 0.12%.

Chinese stocks recovered from early losses and rose 0.12%.

Tokyo shares were little changed after hitting a new 29-year high. Softbank Group shares fell 0.66% after Bloomberg News said the tech investor was cutting its options trading on companies such as Amazon.com Inc and Facebook Inc.

South Korean stocks hit an all-time high amid signs of increasing demand for semiconductors.

US equity futures fell 0.23% after a closing record for Wall Street stocks.

Europe also appeared poised for a softer open, with Euro Stoxx 50 futures down 0.37%, German DAX futures down 0.35% and FTSE futures down. 0.38%.

Benchmark US Treasury yields eased slightly, but remained close to a three-week high as Republicans and Democrats submitted economic stimulus proposals in an attempt to pass a bill sometime this month -this.

Analysts believe the decline in global equities is likely to be limited, as major uncertainties surrounding the outlook now fade.

“We’ve had some positive leads, and a combination of optimism around the vaccine and government and central bank stimulus remains in place,” said Michael McCarthy, chief market strategist at CMC Markets. “It’s a great place for the markets.”

The indicator for MSCI’s stocks across the world rose 0.07% in Asia on Wednesday, approaching a record high.

Pfizer Inc and Germany’s BioNTech SE requested emergency approval of their vaccine candidate from the European regulator on Tuesday. Competitor Moderna Inc also requested emergency approval from the European regulator on Tuesday.

Pfizer and BioNTech have said their vaccine could be launched in the European Union as early as this month, though a European regulator has clouded the schedule by announcing it will complete its review of their vaccine by December 29.

The 10-year US Treasury yield stood at 0.9129% in Asia, not far from a 3-week high of 0.9380% reached in the previous session as investors assessed the likelihood of a increased budget spending.

The spread between two-year and 10-year returns was also close to its strongest in three weeks.

Higher yields did not support the dollar, which was mired near its lowest level in more than 2-1 / 2 years as investor appetite for risk increased.

Earlier this year, Japan’s Softbank group raised eyebrows by buying billions of dollars in call options for US tech giants while taking long positions in underlying stocks.

Some analysts say the coverage by the counterparties that sold the options to Softbank has contributed to a frenzied recovery in the US tech sector.

“This could be big news … and bad for the tech market,” Andrew Brenner, New York-based head of international fixed income at NatAlliance Securities, said in a note, adding that it depends on how much you think SoftBank was behind. increased volatility of options.

Oil prices have prolonged losses in Asian trade after OPEC and its allies left markets in limbo by postponing a formal meeting to decide whether to increase production in January.

Brent futures fell 0.74% to $ 47.01 a barrel, while US crude fell 0.88% to $ 44.16 a barrel.