By Alun John
HONG KONG, Dec 31 (Reuters) - Asian shares edged up on
Thursday and were set to end a tumultuous 2020 at record highs,
after growing investor hopes for a global economic recovery
caused the dollar to fall further against most major currencies.
MSCI's gauge of Asia-Pacific shares excluding Japan
.MIAPJ0000PUS rose 0.17% heading towards its latest closing
peak, having explored fresh territory repeatedly late in the
year. But year-end trading was typically thin.
The index is set for a fourth-quarter gain of over 19%,
which would be its strongest three-month performance since 2009,
giving it a yearly rise just shy of 20%, which would be its
highest since 2017. "A lot of the rise in the second part of the quarter is
because the political risk evaporated," said Kerry Craig, Global
Market Strategist, J.P. Morgan Asset Management, citing the U.S.
election, hopes for an easing in U.S.-China trade tensions and
the Brexit deal.
Looking to 2021, Craig said investors were trying to balance
the potential for rising inflation against a likely economic
recovery, and assess whether that rebound might be impeded early
in the year by new strains of COVID-19 and struggles with
rolling out vaccines. E-Mini S&P futures ESc1 rose 0.16%, and FTSE futures
FFIc1 fell 0.73%.
Asian gains were led by Chinese blue chips .CSI300 which
rose 1.76% on Thursday after the announcement of a trade deal
with the EU overnight. The Hong Kong benchmark .HSI rose
0.31%.
Official data released Thursday also showed activity in
China's service and factory sector expanding in December, albeit
both at a slower pace than the previous month.
However, markets barely flickered at the news that China had
approved its first COVID-19 vaccine for general public use.
Gary Ng, an economist at Natixis in Hong Kong said the
limited impact on the yuan and Chinese equities showed markets
had become 'immune' to this sort of news.
"For the market to react more strongly in 2021, large-scale
(vaccine) rollouts with positive outcomes are needed," he said.
Elsewhere, Australian shares .AXJO fell 1.43% after
tighter restrictions on movement were announced in an effort to
quash fresh COVID-19 cases.
Markets in Japan and South Korea are on holiday on Thursday,
having closed at three-decade and record highs the day
before. QUIET
The dollar =USD traded fairly flat against a basket of
currencies in Asia, halting an earlier decline which saw it
touch its lowest since April 2018.
That trend had helped the risk friendly Australian and NZ
dollars, which both gained around 0.2%.
Bitcoin BTC=BTSP took a rest in Asian trading hours,
rising 0.3% to just under $29,000. The world's largest
cryptocurrency has almost quadrupled in value this year amid
heightened interest from bigger investors.
Oil prices bucked the risk-on trend, however, retreating a
shade as swelling year-over-year supply led some traders to view
any economic recovery ahead to be gradual rather than swift.
U.S. West Texas Intermediate crude CLc1 shed 0.14% to
trade at $48.34 a barrel, far below about $62 at the start of
2020, and Brent LCOc1 was trading down 0.1%, at $51.58. O/R
Global crude oil markets have lost about a fifth of their
value in 2020 as strict coronavirus lockdowns paralysed economic
activity and travel, but prices have rebounded strongly from
their lows as governments rolled out stimulus.
Gold XAU= dropped 0.14% to $1,890.7 an ounce. The precious
metal has risen over 24% this year, its best showing since 2010
as investors looked to safe havens and as the dollar wilted.
Treasuries were little changed, with benchmark U.S. 10-year
yields US10YT=RR at 0.9264% and two-year yields US2YT=RR at
0.1250%.
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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
Wall St Week Ahead ID:nL4N2JA0BW
GRAPHIC-COVID-19 shook, rattled and rolled the global economy
ID:nL1N2J81TR
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