- Asian equities benefit from broad risk-on mood amid vaccine, stimulus optimism.
- Upbeat US data, World Bank’s economic Asia-Pacific forecast also help bulls.
- Australia terms Beijing trade behavior ‘vindictive’, China sanctions the UK.
- European leader worry third covid wave, Queensland witnessed fresh community transmission.
Markets in Asia-Pacific cheered the hopes of economic recovery firming up in the US, backed by better vaccine flow and incoming stimulus, during early Friday. In doing so, China’s dislike for Britain and Australia’s souring relations with Beijing were mostly ignored. Against this backdrop, MSCI’s index of Asia-Pacific shares outside Japan gains over 1.0% while Japan’s Nikkei 225 rises 1.53% by the press time of the pre-European session.
Upbeat prints of US GDP and Jobless Claims back the Fed policymakers’ cautious optimism while US President Joe Biden’s push for faster vaccinations amid ample supply claims seemed to have favored Wall Street the previous day. Also on the positive side were comments from San Francisco Fed President Mary C. Daly that favors the need for further stimulus and rejects the taper tantrums. Additionally, chatters over the $3.0 trillion US infrastructure plan were also positive for the latest run-up of S&P 500 Futures, up 0.30% at intraday at the time of writing.
Australia’s ASX 200 gains half a percent even as Aussie Ambassador to China said, “China has been exposed as quite unreliable as a trading partner and even vindictive”. The risk barometer also ignores the first community virus transmission case in Queensland. It’s worth mentioning that New Zealand’s NZX 50 fails to copy the Australian market’s moves amid fears of losing the prime status of overcoming covid.
Elsewhere, Chinese markets also follow the suit even as Western countries unite against the Dragon nation. This helps stock markets in Hong Kong and Indonesia due to their heavy reliance on Beijing. Furthermore, South Korea and India are also among the gainers as vaccine optimism firms up at their lands.
Above all, the World Bank’s upbeat economic forecasts for China and the rest of Asia-Pacific seem to provide a boost to the risk-on mood. In its latest estimates, the World Bank said, “China’s economy is forecast to expand by 8.1% in 2021 and 5.4% in 2022, compared with 2.3% last year.” The Washington-based institute also mentioned, ”East Asia and Pacific region economies are forecast to grow 7.4% in 2021 and 5.4% in 2022, up from 1.2% last year.”
Moving on, US data becomes the key while headlines concerning vaccines and geopolitics can offer extra optimism if market players keep ignoring China-related negative catalysts.
Read: S&P 500 Futures stay firm above 3,900 as risk-on mood gains acceptance in Asia
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