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GLOBAL MARKETS-Vaccine focus drives Asian stocks to record highs

Published 16/11/2020, 07:21
© Reuters.
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* Japan out of recession; China data encouraging
* MSCI AxJ index hits all-time high; Nikkei at 29-year top
* Currencies, commodities more muted despite equities' gains
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Tom Westbrook
SYDNEY, Nov 16 (Reuters) - Asian equities hit a record high
on Monday as investors set aside fears about rising coronavirus
cases and bought stocks, cheered by data showing a robust
recovery in China and Japan.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS gained 1.1% to hit its highest since its launch
in 1987, with markets across the region making milestone peaks.
Japan's Nikkei .N225 rose 2% to a 29-year high. South
Korea's Kospi .KS11 hit its highest since early 2018 and
Australia's ASX 200 .AXJO hit an eight-month top, before
jamming there when a glitch halted trade. .T .KS .AX
S&P 500 futures ESc1 rose 0.9%, Nasdaq 100 futures NQc1
leapt 1% and European futures were up strongly with EuroSTOXX 50
futures STXEc1 up 0.9% and FTSE futures FFIC1 up 0.6% late
in the Asia session.
"There's just mountains of cash sitting on the sidelines,
waiting to be put to work," said Kyle Rodda, analyst at IG
Markets in Melbourne.
"And since we've got this vaccine news, as well as
diminished risk around the U.S. elections, all of this is flying
into equities ... everyone's thinking now that it's the cue to
get in."
Currency, bond and commodity markets were a little more
circumspect, but the dollar slipped against trade-exposed
currencies and oil bounced off Friday's lows. FRX/ O/R
Japanese economic growth, which beat records and forecasts
to pull the world's third-largest economy out of recession and
better-than-expected industrial output in China added to the
enthusiastic mood. "Rising COVID-19 cases are a risk, but keep the faith,"
Morgan Stanley strategists said in their 2021 outlook note.
"We think this global recovery is sustainable, synchronous
and supported by policy, following much of the 'normal'
post-recession playbook. Overweight equities and credit against
cash and government bonds, and sell dollars."

ASIA MARCHES ON
The announcement, a week ago, that Pfizer PFE.N had
developed a very effective vaccine has investors hoping for
similar good news soon from rival Moderna MRNA.O and looking
past a tough winter to a better spring and summer ahead.
Beaten-up benchmarks in Thailand .SETI and Singapore
.STI have gained more than 5% since the news, with a regional
trade deal sealed over the weekend further supporting the mood.
"A Northern hemisphere slowdown will inevitably appear ...
probably prompting more easing by the Federal Reserve and the
European Central Bank," said OANDA analyst Jeffrey Halley.
"But Asia, comfortably orbiting China's event horizon, seems
to be moving closer to escape velocity of its own accord."
Besides the virus, Brexit trade talks are chief among
European investors' concerns on Monday and hopes for a
breakthrough have supported sterling against the dollar and the
euro. FRX/
The departure of hardline adviser Dominic Cummings from
Downing Street is seen as a positive, perhaps allowing more
British concessions, but chief negotiator David Frost said on
Twitter that talks "may not succeed". Elsewhere the Aussie and kiwi made small gains, much of
which they handed back late in the Asian day.
The next move for the Australian dollar may depend on a
clutch of data and speeches this week, beginning with central
bank governor Philip Lowe at 0840 GMT. AUD/
A slew of U.S. Federal Reserve speakers are also up this
week, beginning with Vice Chair Richard Clarida at 1900 GMT.
Bonds, which had sold off strongly on vaccine news last
week, were steady with where they left off on Friday, with the
yield on benchmark U.S. 10-year debt US10YT=RR at 0.8930%,
down from last week's high above 0.97%. US/
Oil prices inched higher, with Brent crude futures LCOc1
up 1% at $43.26 a barrel but below last week's two-month high of
$45.30. U.S. crude CLc1 rose 1% to $40.55 a barrel. O/R
Gold XAU= rose 0.4% to $1,896 an ounce. GOL/

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