SYDNEY (Reuters) – Asian stocks rose on Monday as fears of rising COVID-19 cases and delayed vaccine deliveries were overshadowed by expectations of a $ 1.9 trillion fiscal stimulus plan to help revive the American economy.
In recent days, global stock markets have reached record highs, betting that COVID vaccines will begin to reduce global inflation and a stronger US economic recovery under President Joe Biden.
However, investors are wary of the high ratings amid questions about the effectiveness of pandemic vaccines and while US lawmakers continue to discuss a coronavirus aid package.
So far, the benchmark has grown by 8.5% in January, and is on track for its fourth consecutive monthly growth.
Japan’s Nikkei recovered from a drop in early trading to 0.36%.
Australian stakes were also slightly higher after the country’s regulator approved the Pfizer / BioNTech COVID-19 vaccine, with authorities saying the phased launch would begin late next month.
Chinese stocks rose as the CSI300 blue-chip index rose 0.6 percent.
“The spotlight will be on Washington this week,” said Stephen Ines, Axi’s chief global market strategist.
The Biden administration has tried to address Republican concerns that their $ 1.9 trillion pandemic relief proposal is too costly, with lawmakers on both sides saying they have agreed to provide Americans with the COVID-19 should be a priority.
Financial markets are experiencing a huge economic stimulus in the United States, although disagreements mean months of indecision in a country suffering more than 175,000 cases of COVID-19 a day with millions out of work.
“Vaccine breaches are likely to make life more functional again at some point in 2021, which will lead to higher GDP growth and more stable corporate profits,” Ines said.
“But the increase in global infections with COVID19, new variants of the virus, the tightening of restrictions on social distancing and delays in the introduction of vaccines in some places increase the short-term risks to growth.”
Global cases of COVID-19 are rising to 100 million with more than 2 million deaths.
Hong Kong closed an area on the Kowloon Peninsula on Saturday, the first such measure the city has taken since the pandemic began.
Reports that the new version of COVID in the UK is not only highly contagious, but perhaps more deadly than the original strain, which has also added to concerns.
In the European Union, political leaders have expressed widespread disappointment with the delays in delivering promised doses to AstraZeneca and Pfizer Inc, and the Italian prime minister has lashed out at vaccine providers, saying the delays are a serious breach of contract.
On Friday, the Dow fell 0.57%, the S&P 500 lost 0.30% and the Nasdaq added 0.09%. The three major US indexes closed higher for the week, with the Nasdaq rising more than 4%.
Jefferies analysts said US stock markets appear to be overvalued, although they still remain bullish.
“In order for the real nasty rest to take off, and not just correct the bull market, there must be a catalyst,” said analyst Christopher Wood.
“This means either an economic downturn or a significant tightening of the Fed’s policy,” Wood said, adding that neither is likely to happen in a hurry.
In foreign currencies, major pairs were closed in tight limits as markets awaited the US Federal Reserve’s meeting on Wednesday.
The dollar index was equal to 90.19 and the euro to 1.2699 dollars, while the sterling was last traded at 1.3691 dollars.
The Japanese yen is unchanged at 103.77 per dollar.
Crude oil prices fell as Brent fell 12 cents to $ 55.29 a barrel and US crude fell 3 cents to $ 52.24.
Gold was higher, with spot prices rising 0.2% to 1,855.9 an ounce.
Edited by Sam Holmes and Sri Navaratnam