Asian shares fall decrease however stimulus, vaccine hopes present assist
© Reuters. Individuals wearing protective face masks after a coronavirus outbreak appear on a Nikkei index screen in front of a realtor in Tokyo
By Stanley White and Jessica DiNapoli
TOKYO / NEW YORK (Reuters) – Asian stocks lost early gains from a strong lead on Wall Street on Wednesday as some investors took gains on a stellar run to hit record highs but hoped for additional US economic stimulus and one Coronavirus vaccine supported market sentiment kept well.
MSCI’s broadest index for stocks in the Asia-Pacific region outside of Japan fell 0.06%, pulling back from last week’s all-time high. Australian stocks erased early gains, falling 0.38%.
China stocks fell 0.22%. Tokyo stocks fell 0.17% after hitting a new 29-year high. South Korean stocks bucked the trend, rising 1.11% on signs of a surge in semiconductor demand.
US stock futures were down 0.4% from a record high for Wall Street stocks.
US Treasury benchmark yields fell slightly but remained close to a three-week high as Republicans and Democrats tabled economic stimulus proposals to pass legislation sometime this month.
Analysts say further downside moves in global stocks are likely limited, with major uncertainties about the outlook now easing.
“We had some positive evidence and a combination of optimism about the vaccine and government and central bank stimuli remains,” said Michael McCarthy, chief markets strategist, CMC Markets. “It’s a sweet spot for markets.”
The MSCI global stock index rose 0.07% in Asia on Wednesday to hit an all-time high.
Pfizer Inc (NYSE 🙂 and the German BioNTech SE (NASDAQ 🙂 applied for urgent approval of their vaccine candidate from the European regulatory authority on Tuesday. Competitor Modern (NASDAQ 🙂 Inc also filed for emergency clearance with the European regulator on Tuesday.
Pfizer and BioNTech said their vaccine could be launched in the European Union as early as this month, although a European regulator tarnished the schedule when it said it would complete its review of its vaccine by December 29th.
US lawmakers also noted advances in economic incentives. U.S. Senate Republican Mitch McConnell said Tuesday that Congress should include a new coronavirus incentive in a $ 1.4 trillion spending bill to prevent a government shutdown amid a pandemic.
In Asia, it was 0.91%, not far from a three-week high of 0.9380% the previous session when investors assessed the likelihood of higher household spending.
The spread between two- and ten-year yields was also nearly the steepest in three weeks.
Higher yields did not support the dollar, which was near its lowest level in more than two and a half years as investor risk appetite increased.
Oil prices prolonged losses in Asian trade after OPEC and its allies left the markets in limbo by postponing a formal meeting to decide whether to increase production in January.
Futures fell 0.53% to $ 47.16 a barrel while they fell 0.63% to $ 44.27 a barrel.
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