Global markets at record highs amid stimulus and recovery hopes – business live | Business
UBS Daily: Asian markets to remain strong in the Year of the Ox
UBS Wealth Management predict that Asia’s stock markets will remain strong this year (the Year of the Ox).
They argue that the region’s macro momentum is strong, and that we are only at the start of the post-pandemic recovery.
Asian stocks have already risen 12% so far this year, outperforming global equities by 6.5 percentage points, while the MSCI Asia ex-Japan index is up 92% since the lows of March 2020.
Mark Haefele, chief investment officer at UBS Global Wealth Management, sees further gains:
“While the rally in Asia may be more measured from here on, we still see another 10% upside for Asia ex-Japan equities by the year-end. We favour reasonably priced quality cyclical names, especially in the internet, memory and media sectors.
We see catch-up opportunities in select industrials, financials, materials and energy.”
Asia-Pacific markets have had another strong day.
Japan’s Nikkei has hit a fresh 30-year high today, jumping 1.28% or 383 points to close at 30,467 points.
In Hong Kong, the Hang Seng surged by 1.8% as trading resumed after the Lunar New Year break.
Jeffrey Halley of OANDA says:
Although not showing quite the same momentum as yesterday, a combination of dovish central banks, and the ever-present US stimulus and vaccine hopes have kept equity markets in business as usual mode.
Introduction: Bull market run continues
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Global stock markets are continuing to strengthen, with stock prices at record levels.
Investors are showing growing confidence that Covid-19 vaccines will calm the pandemic, and that president Joe Biden will dive through a $1.9 trillion stimulus package.
The MSCI All Country World Index has risen steadily since the start of February, and on track to extend that run today as Wall Street reopens after a long weekend.
Jim Reid of Deutsche Bank explains that investors are showing an appetite for risk:
The global reflation theme continued apace yesterday, and risk assets showed continued strength across multiple asset classes. In fact the MSCI World Index, which includes a range of developed world equities, rose for an 11th straight session, marking the longest winning streak for the index since January 2018.
If it manages to notch a 12th gain today, it’ll become the longest winning run since December 2003, back when Arsenal were on their way to winning the Premier League unbeaten, and before most UK households had internet access.
The FTSE 100 surged by 2.5%, or 166 points, to a one-month closing high yesterday, and is on track for further gains today – with IG calling the index up another 20 points.
The UK’s fast deployment of Covid-19 vaccines has raised hopes of an easing of the lockdown – although prime minister Boris Johnson did sound cautious last night, insisting that infection rates need to be really low.
Naeem Aslam, chief market analyst at Think Markets, says investors are hopeful that this current lockdown will be the last.
Over 15 million people have received coronavirus vaccine in the UK, and this is giving the government confidence that they can not only achieve their other targets but also ramp up their vaccination process.
In addition to this, if one looks at the number of people losing their lives because of coronavirus along with the hospitalization rate and new people catching coronavirus, all of them have started to drop quite a lot from their recent high.
But…. this rally further widens the disconnect between the stock market and the real economy – and looks through the damage caused by the pandemic.
On a price-to-earnings basis, stocks have rarely looked pricier.
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