HONG KONG: Most Asian markets advanced again Wednesday as investors ignored a stall in Wall Street’s rally, with eyes firmly on the long-term outlook for the global economy as lockdowns are eased and life slowly improves.
Falling infections rates, growing vaccination programmes and the prospects of a huge spending splurge by the US government within months continue to keep the mood on trading floors upbeat.
However, there remain worries that prices may have gone a little too far, which analysts said was capping any surge for now.
New cases, deaths and hospitalisations — which had pushed medical services to the brink — in major economies including the United States, Britain and Europe are fanning expectations they can begin opening up soon.
There is also apparently little concern about the emergence of new strains in parts of the world that some have warned could be more resistant to the vaccines.
“There is no evidence that new strains compromise protection against severe illness and positive signs that consensus is shifting to re-opening once the most vulnerable are protected,” said Stephen Innes at Axi.
Hong Kong led Wednesday’s rally, piling on 1.7 percent thanks to a surge in Tencent and NetEase following news Chinese authorities had given the green light to their most eagerly awaited games.
Tokyo, Shanghai, Sydney, Manila and Jakarta also rose but Seoul, Singapore and Wellington struggled.
Investors brushed off a slight pullback in New York, where the Dow and S&P 500 came off all-time highs, though the Nasdaq continued to another record.
But Mona Mahajan, at Allianz Global Investors, said some selling would be welcomed. “A pullback here could give tactical opportunities to those who were looking to get involved,” she told Bloomberg TV.
– Eyes on Biden stimulus push –
“It seems like right now the story is just getting started, and the momentum is building behind it, and that story includes the reopening, vaccines, the downward trend now in some of the virus cases we’ve been seeing, supported by the stimulus talks and the Fed still on the sidelines.”
Markets remain upbeat about the chances of Joe Biden pushing through his $1.9 trillion economic rescue package, and while there are warnings that the move — along with an expected economic recovery — will fan inflation, Federal Reserve officials were confident it would not be a long-term problem.
Biden said he was “optimistic” bipartisan agreement could be passed and met top executives from leading companies including Walmart and JPMorgan Chase to shore up support.
However, with Republicans and some Democrats baulking at some parts of the proposal, including more than doubling the minimum wage, could mean the final figure could be slightly lower, with some observers suggesting around $1.4 trillion.
Oil prices were flat, having risen for more than a week to 13-month highs thanks to bets that demand will surge as the world starts to look more normal.
A drop in US inventories added to evidence that the commodity market is well on the road to recovery.
But Innes added: “That print will not dissuade oil prices from heating up further as Brent goes ‘up, up and away’, pushing through $61 and keeps climbing, floated higher by vaccine and stimulus balloons. Although I continue to view oil in overbought territory at these current levels and ripe for profit-taking.”
Bitcoin was also struggling to push past $50,000 after this week’s rally that came on the back of news that Elon Musk’s electric carmaker Tesla had invested $1.5 billion in the cryptocurrency.
The unit was hovering around $46,580, having topped out at $48,215 on Tuesda