Stocks, oil rise in Asia after US records, dollar weakens

(Reuters) – Asian stock markets rose on Tuesday after a record day on Wall Street, as bitcoin paused to catch its breath after an overnight approval from Tesla Inc pushed the cryptocurrency up 20% .

Oil also hit 13-month highs, helped by growing optimism about a return in fuel demand ，

However, a sign that the positive sentiment may wane in European trading, Eurostoxx futures fell 0.05%, FTSE London futures fell 0.12% and E- futures fell 0.12%. mini for the S&P 500 were stable.

Returning to Asia, the largest MSCI index of Asia-Pacific stocks outside of Japan rose 0.37% to 722.95 after climbing to 730.16 at the end of last month.

Gains were led by Chinese blue chips which rose 1.67%, while Hong Kong’s benchmark rose 0.51% and Korea’s rose 0.27%, chip giants enjoying the excitement of bitcoin.

Iris Pang, chief economist for Greater China at ING, said the good performance of Chinese markets was the result of investors buying before the Chinese New Year break, predicting that prices would be higher after the holidays.

Chinese stock exchanges are closed for one week starting Thursday.

Japan’s Nikkei rose 0.27%.

Tuesday’s gains in Asia matched so-called reflation trades around the world, in which global markets are pushing up stocks, oil and gold while yields on US Treasuries have held steady at an 11 month high.

“Reflation following the US fiscal stimulus and positive vaccine news remains the main theme of the markets,” the National Australia Bank strategists wrote.

Inflation is expected to rise as governments and central banks continue with massive spending and easy money policies until officials are certain their economies will recover from the coronavirus pandemic.

Wall Street hit all-time closing highs on Monday, as the Nasdaq Composite added nearly 1% and the S&P 500 and Dow Jones Industrial Average gained around 0.75%.

In more volatile cryptocurrency markets, bitcoin topped $ 47,000 for the first time, up 20%, before fluctuating a bit below that level.

Tesla Inc said overnight that it has invested around $ 1.5 billion in virtual currency and expects to accept it as payment for its cars in the future.

Justin d’Anethan, director of sales at digital asset firm Diginex, said most of the selling pressure in Asia has been absorbed.

“This morning, after the liquidation of over $ 1.2 billion in leveraged shorts, regular crypto sellers will likely think twice before throwing their coins,” Anethan said.

Oil prices continued to climb Tuesday to reach 13-month highs.

Brent rose 45 cents, or 0.74%, with US West Texas Intermediate crude at $ 58.39 a barrel, up 43 cents, also 0.74%.

“There is a feeling that the oil supply glut is disappearing faster than anyone thought possible,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “There seems to be a paradigm shift in the market.”

Spot gold rose 0.37% to $ 1,837 an ounce, a week’s high, as expectations of a major US economic stimulus package increased its appeal as a hedge against inflation.

Such expectations hit the dollar index, which retreated further on Tuesday after stumbling late last week on a weaker-than-expected jobs report. It was last down 0.25% to 90.728.