- Asian stocks lack clear directional bias despite positive news on the coronavirus vaccine front.
- Goldman Sachs raises the US Q3 GDP forecast.
- Oil’s recent slide suggests global economic recovery is stalling.
Asian equities are trading mixed on Friday with commodities signaling a stalling of global economic recovery from the coronavirus pandemic.
While stocks in Japan are up 0.38%, those in Australia, New Zealand, and South Korea are trading in the red. The Shanghai Composite is trading flat, and Hong Kong’s Hang Seng is up 0.32%.
Analysts at Goldman Sachs and Morgan Stanley expect the US-based pharma and biotechnology firms’ coronavirus vaccines to get approval in the October-November period. Also, economists at Goldman Sachs are foreseeing a strong US economic rebound in the third quarter. Economists have raised their forecast for the US third-quarter GDP to 35% from 30%, citing resilient consumer spending.
However, these positive developments are likely being overshadowed by the sell-off in commodities, especially oil. The black gold fell by 7.7 last week and looks set to end this week with a 5% drop. Major oil trading firms are again booking storage facilities offshore, a sign of weak demand or economic rebound.
Another reason for Asian stocks’ failure to cheer good news could be renewed Brexit tensions and overnight sell-off in the US stocks. Wall Street fell on Thursday with technology stocks with mega-cap technology shares extending the recent rout and energy shares, tracking oil prices lower.
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