Asia Markets wrap

Bangkok: Asian markets were mixed on Wednesday following a record surge on Wall Street amid a spurt of relief when it was confirmed that US President-elect Joe Biden could begin his transition to take power in the White House. 

Investors were also cheered by Biden’s plan to nominate former Federal Reserve chairman Janet Yellen as Treasury Secretary and more positive news on coronavirus vaccines. Yellen is seen as likely to want to tackle wealth inequality and cut unemployment, and analysts say she could work well with current central bank head Jerome Powell.

Wall Street’s three main indexes ended more than 1% higher on Tuesday, with the Dow closing above 30,000 for the first time and the S&P 500 also notching up a record.

The rally initially carried on in Asia, but traders lost momentum as the day wore on, succumbing to profit-taking and concern about the recent rise in Covid-19 infections in the Europe, the US and even China, which saw outbreaks in Shanghai and other places, although they may be limited in size. 

But signs that infection rates in Europe are slowing enough to allow some countries to ease lockdown measures added to the sense of hope across trading floors. However, excitement was tempered by the high number of cases and deaths, as well as a pick-up in several Asian nations that are causing governments to reimpose containment measures.

In Asia, Japan’s Nikkei rallied 0.5% to a 29-year high. Other markets in Hong Kong, Sydney, Wellington and Bangkok also rose, but Shanghai, Singapore, Seoul, Taipei, Manila, Jakarta and Mumbai were all in the red.

Later, stocks in London, Paris and Frankfurt started with small gains.

Political clarity

Fiona Cincotta, an analyst at Gain Capital, said: “After a record-setting session in the US, EU stocks are heading broadly higher, although the pace of gains suggest that the risk rally is easing slightly. Vaccine optimism, EU governments starting to ease lockdown restrictions and more US political clarity have driven stocks firmly higher across the start of the week. 

“However, investors are now looking ahead to a slew of US data due later today for further cues ahead of the Thanksgiving break.” Markets were speculating that the choice of the “market-friendly” Yellen may be “a sign that Joe Biden could be more interested in the economic recovery than pursuing aggressive regulatory policy,” she said. 

Some high-yielding currencies that surged in the morning also gave up their gains, though expectations of a rise in demand continued to support oil prices, which have jumped around a quarter over the past month and are now sitting at levels not seen since March.

Global energy shares have risen almost 34% this month and are on track for their best month on record. Oil prices held near their highest levels since March on hopes fuel demand would see a quick recovery.

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Asian stocks

In Tokyo, the Nikkei rose by 0.5%

In Hong Kong, the Hang Seng was up 0.3%

In Shanghai, the Composite closed down 1.2%

With reporting by AFP

This report appeared initially on Asia Times Financial.