Asia Joins Global Equity Rally; Oil weak on COVID-19 worries
© Reuters. Television cameramen wait for the market to open in front of a large screen showing stock prices on the Tokyo Stock Exchange in Tokyo
Posted by Kevin Buckland
TOKYO (Reuters) -Asian stocks rose Thursday, extending the rebound in world markets after a sharp sell-off earlier this week, while oil prices eased on fears that rising COVID-19 cases in some countries could dampen fuel demand.
Japan rallied 2% after falling 2% in each of the previous two sessions.
The broadest MSCI index for stocks in the Asia-Pacific region outside Japan rose 0.3% from a 0.9% decline the previous day.
Hong Kong was up 0.5%, but mainland China stocks were weaker, hurt by ongoing concerns over tensions between China and the US. Chinese blue chips were down 0.1%.
European futures indicated higher opens, with futures gaining 0.5% each.
“Overall, I think the markets still have a tendency to take risks and I don’t think we’ve seen the final all-time high in the US stock market or global stocks,” said Kyle Rodda, market analyst at IG Melbourne.
“At the end of the day (the sell-off earlier this week) only the markets whipped around as the foam blew away the risk assets.”
The MSCI global stock index rose 0.2% on Thursday after rising 0.4% overnight to bring it back to 1% of its all-time high.
On Tuesday the index was down 0.8%, the strongest in four weeks. Market sentiment deteriorated amid concerns that coronavirus infections are recorded in India, likely restrictions in Japan and rising cases in Latin America will hamper global economic recovery.
On Wall Street, the value rose 0.9%, reversing two days of the decline to end Wednesday’s session just 12 points below the record close.
however, indicated a softer open later Thursday, down 0.2%.
“The ‘buy the dip’ mentality seems to be back in stocks,” wrote Tapas Strickland, an analyst at National Australia Bank (OTC :), in a customer announcement.
Oil prices eased for a third day amid fears that rising COVID-19 cases in India would lower fuel demand for the world’s third largest oil importer, while a surprise surge in US inventory levels heightened the negative tone.
fell 29 cents to $ 61.06 a barrel and 29 cents to $ 65.03 on Thursday.
decreased to $ 1,791.04 an ounce.
US Treasury yields remained depressed. The benchmark 10-year bond yield fell 3 basis points to 1.5345% on Thursday, near its lowest level since March 12.
In the forex markets, the dollar remained near multi-week lows versus major competitors as US yields remained subdued.
The dollar was at 107.935 yen, near a seven-week low, while the euro was trading at $ 1.2034, not far from its strongest level since March 3.
The European Central Bank will decide the policy later Thursday with no change expected.
The US Federal Reserve and the Bank of Japan will follow next week.