· Asia stocks climb on vaccine, U.S. stimulus optimism; dollar skids
Asian stocks were buoyant on Wednesday and the dollar eased as hopes of effective coronavirus vaccines and the growing prospect of more U.S. fiscal stimulus cheered investors ahead of the Christmas holiday season.
MSCI’s broadest index of Asia Pacific shares outside of Japan rose 0.8% after two straight days of losses.
The index, hovering near record highs, is up 3.8% so far in December and is on track for its best yearly performance since 2017 thanks to generous government and central bank stimulus around the world.
Markets will now look to the U.S. Federal Reserve for new projections on whether the economy will suffer a double-dip recession or is on the cusp of a vaccine-inspired boom.
The central bank is to release a statement later in the day, with analysts expecting some guidance on when and how the Fed might change its bond purchases.
Optimism for a trade deal on Brexit also boosted stocks, while contributing to a weaker dollar against the British pound and the euro.
· China's blue-chip index closes higher on consumer shares; SMIC slumps
China’s blue-chip index ended higher on Wednesday as optimism over the continued recovery in the world’s second-largest economy lifted consumer stocks, offsetting weakness in the tech sector.
At the close, the Shanghai Composite index ended flat at 3,366.98, while its blue-chip CSI300 index was up 0.18%.
· Chinese chipmaker SMIC falls 5% as co-CEO plans to resign and it faces removal from MSCI indexes
Shares of Chinese chipmaker SMIC fell over 5% on Wednesday after the company said it was aware its co-CEO planned to resign and as its stock was set to be removed from MSCI indexes.
SMIC said it had become “aware” of co-CEO Mong Song Liang’s “intention of conditional resignation.”
Meanwhile, American stock index company MSCI, one of the largest in the world, said it will remove SMIC from its indexes from Jan. 5, 2021, among other Chinese companies. It said it was doing so after these companies were named in an U.S. executive order that bans American companies and individuals from owning shares of Chinese companies that the White House alleges supports China’s military.
China has been on a drive to become more self-reliant in semiconductors, a move that has accelerated in the past few years as tensions with the U.S. rose. SMIC is key to China’s ambitions.
However, Washington has sought to make it harder for China’s industry to catch up. In September, the U.S. reportedly imposed sanctions on SMIC that made it harder for it to acquire the American technology that it needs. This month, SMIC was added to the U.S. blacklist of alleged Chinese military companies.
· European markets open higher, following positive global trend
European stocks opened higher on Wednesday, following a positive trend on Wall Street on Tuesday and in Asia Pacific markets overnight.
The pan-European Stoxx 600 climbed 0.5% in early trade, with autos adding 1.1% to lead gains as almost all sectors and major bourses entered positive territory.
Reference: CNBC, Reuters
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