Asian stocks hit record high, as earnings, stimulus boost recovery hopes

Japan's Nikkei 225 slipped 0.31 per cent. — Reuters pic
Japan's Nikkei 225 slipped 0.31 per cent. — Reuters pic

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NEW YORK, Feb 10 ― Asian stocks hit a record high today, as upbeat earnings, hopes of a large US fiscal stimulus and progress in vaccinations fanned optimism about a global recovery from the pandemic.

MSCI's ex-Japan Asian shares index rose 0.8 per cent, rising above its January peak to reach its highest level ever.

In mainland China's CSI300 rose 1.3 per cent to a 13-year high and the Shanghai Composite hit a five-year high on the last trading day before the week-long Lunar New Year holidays.

Japan's Nikkei eked out gains of 0.1 per cent while e-mini futures for the US S&P 500 rose 0.35 per cent.

Corporate earnings have been beating expectations in many places including the United States and Japan.

In the latest example, shares of Lyft Inc rose as much as 11.8 per cent while Twitter Inc climbed 3.5 per cent in aftermarket trading on their latest quarterly results.

“Globally investors are raising weightings on stocks as the Biden administration looks set to spend pretty much close US$1.9 trillion (RM7.7 trillion) on its stimulus,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

Although US President Joe Biden's stimulus package faces opposition from Republicans, his fellow Democrats last week approved a budget outline that will allow them to muscle the stimulus through in the coming weeks without Republican support.

On Wall Street, major stock indexes closed little changed yesterday, though the tech-heavy Nasdaq Composite eked out a record high on a gain of 0.14 per cent. The S&P 500 lost 0.11 per cent.

The S&P had climbed the previous six sessions and is up 5.3 per cent for the month, underpinned by the prospects of the large US relief package.

The yield on the benchmark US 10-year Treasury notes was last at 1.16 per cent, not far off Monday's 10 1/2-month high of 1.20 per cent.

Higher bond yields also reflect rising inflation expectations, with break-even inflation calculated from inflation-protected Treasuries rising to 2.20 percent, the highest since 2014.

The Fed has said it would tolerate inflation rising beyond 2 per cent temporarily.

US inflation data, due later today, is expected to show an annual rise of 1.5 per cent in core CPI.

In the currency market, the dollar traded near two-week lows against a basket of currencies after sizable fall in the previous trade.

The dollar traded at ¥104.55 after 0.64 per cent fall yesterday, its biggest in three months, while the euro changed hands at US$1.2119, extending its rebound from a two-month low of US$1.1952 touched on Friday.

The British pound held firm at US$1.3822, hitting its highest level since April 2018.

The offshore Chinese yuan held firm at 6.4185 to the dollar, within sight of its 2 1/2-year high of 6.4119 set on January 5.

Bitcoin, which gained 19.5 per cent on Monday, stood little changed at US$46,292, not far off its record high of US$48,216 set yesterday.

Ethereum, the second-most-popular cryptocurrency, hit a record high of US$1,826.

Spot gold added 0.3 per cent to US$1,842.8 an ounce after rising to a one-week high yesterday.

Brent oil held firm at US$61.03 per barrel, near 13-month highs after a seven-day winning streak as investors are betting that fuel demand will rise while Opec and allied producers keep a lid on supply.

“With Brent over US$60, it's been great psychologically,” said John Kilduff, partner at Again Capital LLC in New York. “Everyone is feeling bullish about stronger demand and global inventories in further decline.” ― Reuters

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