BofA warns Fed risks policy mistake with early rate cuts
* MSCI ex-Japan up for ninth straight session
* Longest winning streak for the index since early 2018
* Oil prices jump hopes of higher fuel demand as lockdowns
ease
* Analysts say the road to recovery is still long
By Swati Pandey
SYDNEY, June 9 (Reuters) - Asian stocks rallied for their
ninth straight day on Tuesday and oil prices jumped as the
lifting of coronavirus lockdowns in many countries fed investor
hopes of a relatively quick global economic recovery.
Markets have been particularly encouraged by a May U.S. jobs
report last week that showed a surprise fall in the unemployment
rate, sending Wall Street indices surging with the Nasdaq
.IXIC hitting a record close on Monday. .N
Global financial markets were battered in March as investors
fretted over extent of both the short and longer term damage to
the world economy from the coronavirus pandemic. But most
indices are now back to pre-COVID-19 levels.
MSCI's broadest index of Asia-Pacific shares outside of
Japan .MIAPJ0000PUS rose for a ninth straight session for its
longest winning streak since early 2018. It was last up 0.76% at
a three-month peak.
Australia's S&P/ASX 200 .AXJO jumped 2.5% while Chinese
shares started on a firm footing with the blue-chip CSI300 index
.CSI300 rising 0.4%. Hong Kong's Hang Seng index .HSI
climbed 1.2%.
Japan's Nikkei .N225 bucked the trend to be down 0.5%.
"The good news is that this shows central banks' effort to
stabilise the market have worked," said Tai Hui, Chief Asia
Market Strategist at J.P. Morgan Asset Management.
"The current risk rally is driven by investors' belief that
the worst of this recession is behind us, which we agree with.
Yet, investors need to be mindful of the potential risks ahead."
Tai said the "road to recovery" was still long while the
threat of a second wave of coronavirus infections cannot be
ruled out yet.
Fears of renewed trade tensions between the United States
and China and the second round impact from higher unemployment
and bankruptcies worldwide also hung heavy on the outlook
For now, though, investors were taking a glass-half-full
view on the global economy.
Financial, automotive and retail-oriented and energy shares
- the stocks most beaten-down since the pandemic slammed markets
- have been leading world equity indices higher recently.
Overnight on Wall Street, the Dow .DJI rose 1.7%, the S&P
500 .SPX gained 1.20% and the Nasdaq Composite .IXIC added
1.13%.
U.S. stocks were also bolstered by a move by the Federal
Reserve to ease the terms of its "Main Street" lending program
to encourage more businesses and banks to participate.
Investors are now seeking further clarity on U.S. monetary
policy after the Fed's two-day policy meeting ends on Wednesday.
In currency markets, the risk-sensitive Australian dollar
AUD=D3 hit a five-month top of $0.7043 after eight straight
days of gains but has encountered some selling pressure at those
heady levels.
Its New Zealand counterpart NZD=D3 jumped to a four-month
high.
The safe-haven Japanese yen also nudged up 0.2% at 108.15,
while the euro EUR= was off a touch at $1.1285.
In commodities, U.S. benchmark crude CLc1 rose $1.28 a
barrel to $38.68 a barrel, while Brent LCOc1 added $1.13 to
$41.25.
Gold prices XAU= were up after a steep decline, boosted by
hopes of a dovish monetary policy outlook from the Fed. Spot
gold was last up 0.1% at 1,697.1.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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