Most Asian markets rise after Wall St record, eyes on jobs data

(AFP)

HONG KONG -Asian markets mostly rose Friday, tracking another New York record, with recovery optimism and vaccine hope trumping worries over a spike in new virus infections, while oil prices extended gains after OPEC failed to reach a deal on lifting output.

Traders are now looking forward to much-anticipated US jobs data later in the day, which will provide a fresh snapshot of the world’s biggest economy and possibly give the Federal Reserve further reason to begin tapering its ultra-loose monetary policy.

The rapid spread of the Delta virus variant has become a cause for concern for several governments and has forced some, including Australia and South Africa, to reimpose lockdown measures.

However, other countries such as Britain, the United States and parts of Europe were pressing ahead with their reopenings despite a surge in new cases, with vaccines appearing to help keep deaths and hospitalisations down.

Johnson & Johnson became the latest pharma giant to say its drug was effective against Delta and offered durable protection against infection more broadly.

Confidence in the jabs and a string of healthy economic readings out of various countries is helping push equity markets higher, and on Thursday the S&P 500 hit a record for the sixth day in a row. And the general consensus is the rally still has some way to go, albeit with the odd bump in the road.

The latest figures showed US jobless applications fell again last week to an pandemic-era low, while manufacturing activity continued to improve.

Oil extends gains

Meanwhile, the International Monetary Fund added to the positive mood, forecasting the US economy to expand seven percent this year, its highest since 1984, while it also upped its outlook for next year.

“With economic and earnings growth prospects robust, policy accommodative, and valuations still appealing relative to bonds, we believe the current environment is supportive of further equity gains,” Mark Haefele of UBS Global Wealth Management said.

After Wall Street’s rally, Asia enjoyed broad gains.

Tokyo, Sydney, Seoul, Singapore, Taipei, Wellington, Manila and Jakarta were all up, though Hong Kong and Shanghai slipped more than one percent owing to a sell-off in tech shares.

All attention is now on the US non-farm payrolls data on Friday, with the Fed paying close attention as it considers its next step on monetary policy.

The blockbuster recovery this year — and likely continuation of it into 2022 — has pushed the central bank to bring forward projections for winding down its massive bond-buying programme, with some predicting it will start later this year.

However, while that would mean the beginning of the end of its accommodative programme, analysts expect it to move slowly so as not to upset markets.

On oil markets, both contracts rose in Asia, having rallied Thursday after OPEC and other major producers delayed until Friday a decision on whether to boost output in light of rebounding demand. WTI and Brent are at levels not seen since 2018.

A panel had earlier recommended they pump an extra 400,000 barrels a day, less than forecast, despite fears that supplies are tightening quickly. Still, officials are unable to reach a deal and observers say the meeting could end with no increases agreed, putting further upward pressure on prices.

Key figures at 0230 GMT

Tokyo – Nikkei 225: UP 0.3 percent at 28,791.10 (break)

Shanghai – Composite: DOWN 1.5 percent at 28,397.90

Hong Kong – Hang Seng Index: DOWN 1.3 percent at 3,540.05

Euro/dollar: DOWN at $1.1844 from $1.1855 at 2050 GMT

Pound/dollar: UP at $1.3770 from $1.3762

Euro/pound: DOWN at 86.02 pence from 86.10 pence

Dollar/yen: UP at 111.59 yen from 111.54 yen

West Texas Intermediate: UP 0.2 percent at $75.41 per barrel

Brent North Sea crude: UP 0.3 percent at $76.04 per barrel

New York – Dow: UP 0.4 percent at 34,633.53 (close)

London – FTSE 100: UP 1.3 percent at 7,125.16 (close)

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