A man reflected on the stock price chart in Tokyo, Japan
Asian stocks hit six-week highs on Monday amid indications that the global economic recovery is still on the right track, although a spike in COVID-19 cases in the region weighed on sentiment, pushing oil prices lower.
Eurostoxx 50 futures were stable, as were those of the German DAX, while FTSE London futures were slightly weaker. S&P 500 futures have hardly changed.
The mood was relatively bullish in Asia as the ex-MSCI Asia-Pacific Stock Index for Japan (MIAPJ0000PUS) hit its highest level since March 18th, despite the late sell-off in Chinese stocks.
“Markets have classified the epidemic as a sprint, not a marathon.” This hypothesis could be challenged in the coming weeks, “said Geoffrey Haley, chief market analyst for the Asia-Pacific region at OANDA.
Fears that an increase in COVID-19 cases in India has reduced fuel demand for the world’s third-largest oil importer, pressured oil prices on Monday after falling nearly 1% last week.
The Chinese CSI 300 Index (.CSI300) is down 0.7% after hitting its highest level since April 6 earlier in the day. The Australian Shares Index (.AXJO) is down 0.2% with a public holiday in five of the nation’s eight states and territories.
South Korea’s KOSPI (.KS11) rose 0.7%, while New Zealand stocks rose 0.6% and Japan’s Nikkei Index (.N225) reversed its first losses, adding 0.4%.
Risky assets such as stocks have performed well so far, as the ex-MSCI Japan Index is on track for its third consecutive year of positive returns. Since April 2020, the index has delivered positive returns in all but three months.
Recent data indicating a strong global economic recovery has boosted confidence in risky assets.
Manufacturing indices released in early April last week signaled a strong start to the second quarter, as data reached record levels in the US and signaled the end of the double-dip recession in Europe.
Analysts said US first-quarter GDP data, due for release later in the week, will show activity is likely to return to pre-pandemic levels.
“We believe the economy will close the production gap and exceed potential in the second half of this year,” ANZ economists wrote in a morning note, citing further rally in stocks.
Europe cannot match that, but as 2021 progresses to 2022, the growth gap with the United States will narrow.
However, some economists say the market may see a downturn in the coming months, reflecting concerns ranging from a spike in COVID-19 cases to concerns that most of the benefits of a massive fiscal stimulus have already been taken into account.
“In other words, this could be the last quarter where companies can avoid being penalized for not seeing their revenue recover quickly and / or not providing guidance,” JPMorgan analysts wrote in a note.
Des données récentes solides ont signifié que les obligations ont été vendues, bien que les rendements du Trésor américain à 10 ans ne soient pas loin d’un creux récent de six semaines sur les attentes de la Réserve fédérale améric restera accommodante lors this week.
In foreign currencies, the Turkish lira weakened slightly, adding to the recent decline and approaching an all-time low as relations with the United States cooled and after the new central bank chief indicated that raising interest rates would hurt the economy.
The US dollar index fell to 90.679 against a basket of major currencies, a level not seen since March 3.
The dollar was down against the Japanese yen at 107.80. The euro rose 0.1 percent to $ 1.2105. The risk-sensitive Australian dollar remained trapped in a narrow range, being the last at $ 0.7766.
In commodities, US crude fell 73 cents to $ 61.41 a barrel and Brent crude fell 78 cents to $ 65.33.
Gold rose 0.1% to $ 1,779.19 an ounce.