· GLOBAL MARKETS-Asian stocks near 4-month highs on vaccine hopes, eyes on U.S. payrolls
Asian stocks hovered near four-month highs on Thursday on hopes of a vaccine for COVID-19 while copper prices jumped to a more than six-month peak on a better global outlook and supply fears in top producer Chile.
All eyes are on U.S. employment data, due later in the day, which are expected offer further cues into how the world’s largest economy is coping with a rise in coronavirus cases in several states.
In a sign the positive sentiment will extend elsewhere, E-minis for S&P500 rose 0.3% while futures for Euro Stoxx 50 rose 0.8% and those for Germany’s DAX climbed 0.8%. London’s FTSE futures added 0.6%.
Risk sentiment was whetted by a COVID-19 vaccine from Pfizer and Germany’s BioNTech, which was found to be well tolerated in early-stage human trials.
A vaccine for COVID-19, which has killed more than half a million people globally and shut down the world economy, has been long anticipated.
MSCI’s broadest index of Asia Pacific shares outside of Japan rose 1.5% to near levels seen in early March.
All major Asian indexes were upbeat with Japan’s Nikkei rising 0.1%, China’s blue-chip index adding 1.7% while Hong Kong’s Hang Seng index climbed 1.8%.
· Nikkei gains on hopes of economic rebound; Mothers start-up index dives
Japanese shares climbed a tick higher to end firmer on Thursday on subtle signs that the global economy was emerging from the coronavirus lockdown, though investors maintained a cautious stance after Tokyo reported a spike in COVID-19 cases.
The benchmark Nikkei average edged up 0.1% to 22,145.96, partially clawing back from the previous session’s losses of 0.8%, with cyclical stocks lifting the index.
Soichiro Matsumoto, chief investment officer Japan at Credit Suisse, called the current Nikkei’s level of around 22,000 “a pretty good level” for many investors. He expects Tokyo shares to remain range-bound, saying there’s not much upside left in the medium term.
The broader Topix rose 0.3% to 1,542.76, with about three-thirds of the 33 sector sub-indexes on the Tokyo exchange finishing higher.
· China's blue-chip index closes at 2-1/2-year high on stimulus
China stocks rallied on Thursday, with the blue-chip index closing at its highest in two-and-a-half years, boosted by Beijing’s decision to spend more to prop up the economy.
The blue-chip CSI300 index ended 2.1% higher at 4,335.84, its highest closing level since Jan 26, 2018, while the Shanghai Composite Index gained 2.1% to 3,090.57.
China’s finance ministry has said it is planning to sell more special treasury bonds to fund public health-related infrastructure facilities and aid a virus-hit economy, part of a proposal to issue 1 trillion yuan in such bonds this year.
· European markets advance, boosted by vaccine hopes
European stocks traded higher Thursday as global markets received a boost from news surrounding the development of a potential coronavirus vaccine.
The pan-European Stoxx 600 climbed 0.8% in early trade, with banks jumping 2.6% to lead gains as all sectors and major bourses entered positive territory.
European stocks are tracking global markets higher, with investor sentiment getting a boost from news that a vaccine candidate being developed by Pfizer and BioNTech shows potential. An early-stage human trial of one of four potential coronavirus vaccines it’s developing showed the drug created neutralizing antibodies. The results, which were posted online, have yet to be reviewed by a medical journal.
· S&P 500 Forecast: Likely to Continue Reaching Towards 3150
The S&P 500 has rallied significantly during the trading session on Tuesday, breaking towards the 3090 handle. This is a market that is likely to continue to see buyers on dips, and I think that the 3150 level will probably be targeted. With that in mind, I like the idea of buying short-term pullbacks as it gives us an opportunity to pick up value. I think that the market has plenty of support underneath, so I do not have any interest whatsoever in trying to short this market.
The 50 day EMA underneath at the 3000 level will offer a bit of support, not to mention the fact that the 3000 level is a large, round, psychologically significant figure that would cause quite a bit of attention. The 200 day EMA is just below, so at this point in time it is likely that there are buyers underneath in that area as well. Ultimately, this is a market that I think will continue to grind higher, and I would look at these pullbacks as value that needs to be jumped on. The 3150 level is an area that has offered resistance previously, and therefore it is likely to see a lot of action. If we can break above there, then it is likely we go looking towards the 3200 level.
If we break above the 3200 level, then it is likely we continue to go much higher as it was the most recent high and we had seen a lot of selling from that level previously. Most likely, I suspect that we are going to see this market go back and forth, killing time in this area as we try to figure out whether or not the fears of economic recession takeover, or if we are simply going to pay attention to the liquidity coming out of the Federal Reserve. I suspect that the latter of the two will probably come out on top, but that does not mean that it will not be noisy. We also have the jobs number coming out the next few days, so that could keep a bit of a cap on this market, but once we get past that announcement, we could then see quite a bit of buying pressure. If we break down below the 200 day EMA, I will “reset”, and take a look at whether or not there is a new trade.
Reference: CNBC, Reuters, Daily FX
Thai
Eng