Asian shares open higher following stellar month of gains

Japan's Nikkei is 0.9 per cent higher buoyed by the prospect of a Covid-19 vaccine. — Reuters pic
Japan's Nikkei is 0.9 per cent higher buoyed by the prospect of a Covid-19 vaccine. — Reuters pic

SYDNEY, Dec 1 — Asian share markets opened slightly higher today buoyed by the prospect of a Covid-19 vaccine, reversing the previous day's dips as investors took profits at the end of a record-breaking month.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.26 per cent today after closing the month 9 per cent higher, the best November since 2001. Japan's Nikkei and Australia's S&P/ASX 200 were each 0.9 per cent higher, while South Korea was up 1.4 per cent.

China's index was 0.36 per cent higher, following data yesterday that pointed to a continued recovery in the world's second-largest economy against the backdrop of the Covid-19 pandemic.

“We've seen clearly a huge wave of liquidity coming to equities in response to the vaccine news and in response to US election news,” said Hamish Tadgell, a portfolio manager at SG Hiscock & Company.

“But there are still risks, and as a result we could see the market pull back, I think, particularly as we come into sort of the Christmas period.”

Wall Street was weaker yesterday, partly driven by a rebalancing of portfolios, as investors cashed in on gains after a strong month punctuated by updates of Covid-19 vaccines progressing and hopes of a swift economic rebound next year.

“There was profit taking around the world so we ended a record month with a whimper not a bang, and you know, taking a little bit of a breather,” said Interactive Brokers Chief Strategist Steve Sosnick.

“I think that markets are pricing in, if not fully pricing a recovery, they are pricing in the vast majority of it (and) it's very hard to meet these elevated expectations.”

MSCI's gauge of stocks across the globe was roughly flat. Hong Kong's Hang Seng index futures were down 0.36 per cent, while China's CSI 300 futures were 0.36 per cent higher.

In the United States the Dow Jones Industrial Average fell 0.91 per cent yesterday while the S&P 500 lost 0.46 per cent. The tech-heavy Nasdaq Composite ended down 0.06 per cent.

Moderna Inc applied for US emergency authorisation for its Covid-19 vaccine after full results from a late-stage study showed it was 94.1 per cent effective with no serious safety concerns.

“US markets were a little bit lower, that's what was holding us back a little bit,” said Chris Weston, head of research at Melbourne brokerage Pepperstone. “People are pretty optimistic for a good 2021.”

The US dollar was under pressure today, after closing out its worst month since July with a little bounce and as investors reckon on even more US monetary easing.

Oil prices were slightly lower on uncertainty about whether the world's major oil producers would agree to extend deep output cuts at talks this week.

US crude eased back 11 cents to US$45.23 (RM184.06) a barrel today, while Brent crude futures were largely unchanged at US$47.86. — Reuters

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