World shares rise on recovery hopes, following stellar November
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[December 01, 2020] By
Danilo Masoni and Paulina Duran
MILAN/SYDNEY (Reuters) - World shares edged
up to just below record peaks on Tuesday after robust China data boosted
expectations of a recovery from the COVID-19 downturn and as drugmakers
seek fast approval for their vaccines and authorities look set to keep
stimulus support.
Bets of more easing from the Fed in the United States to help the
pandemic-hit economy through the winter weighed on the dollar, as
riskier currencies rose, while crude prices missed out on the bounce
after OPEC+ countries delayed a decision on output cuts.
The MSCI world equity index, which tracks shares in 49 countries, was up
0.4% by 0849 GMT.
Breakthroughs in vaccine developments from top drugmakers Pfizer,
Moderna and AstraZeneca last month along with a market-friendly outcome
of the U.S. presidential election helped the index score its best month
on record, up 12% to new all-time peaks.
"We believe the rally can continue, with the current pipeline of
expected vaccine rollouts in line with our central scenario of
widespread availability in the second quarter of 2021," said Mark
Haefele, Chief Investment Officer at UBS Global Wealth Management in
Zurich.
"We also believe that a divided U.S. government - which looks the most
likely outcome - is no impediment to a rising market," he added.
In Europe the pan-regional STOXX 600 benchmark was up 0.7% in early
deals, while U.S. stock index futures also pointed to a strong start on
Wall Street with investors focusing on November manufacturing surveys
from Europe and the United States.
Earlier the MSCI's broadest index of Asia-Pacific shares outside Japan
added 1.3%, while China's blue-chip CSI300 index jumped 2.2% after a
business survey showed on Tuesday activity in China's factory sector
accelerated at the fastest pace in a decade in November.
Japan's Nikkei rose 1.3% while Australia's S&P/ASX 200 gained 1.1% after
Australia's central bank said the country's economy would need fiscal
and monetary support "for some time".
"What we are seeing today is that upward trend reasserting itself, given
the positive news on the vaccine front, China's growth picking up, and
the tremendous faith in the ability of central banks to keep the markets
afloat," said Stephen Miller, market strategist for GSFM Funds
Management.
Moderna Inc applied for U.S. emergency authorization for its COVID-19
vaccine after full results from a late-stage study showed it was 94.1%
effective with no serious safety concerns.
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A passerby wearing a protective face masks walks past an electronic
board showing Japan's Nikkei average and the exchange rate between
Japanese yen against the U.S. dollar, amid the coronavirus disease
(COVID-19) outbreak, in Tokyo, Japan September 17, 2020. REUTERS/Issei
Kato
In foreign exchange markets, the dollar was under pressure after closing out its
worst month since July with a little bounce and as investors reckon on even more
U.S. monetary easing.
The dollar index was last down 0.3% to 91.706.
In a speech released late on Monday, Fed chair Jerome Powell said a slowing
recovery and a surging pandemic meant the U.S. was entering a "challenging" few
months, with the potential deployment of a vaccine still facing hurdles.
Elsewhere sterling hit a three-month high as traders clung to hopes for a Brexit
trade deal before the year's end, while risk-related currencies such as the
Canadian and Aussie dollar rose against the greenback.
The U.S. bond market was steady, as the U.S. Congress began a two-week sprint to
secure government funding and avoid a possible shutdown amid the coronavirus
pandemic.
U.S. 10-year yields were up slightly at 0.8438%.
Germany's benchmark 10-year bond yield hovered near three-week lows, while
southern European debt yields kept record lows in sight ahead of next week's
European Central Bank meeting.
Germany's Bund yield was a touch lower in early trade at -0.574%, close to
Monday's three-week low of -0.60%.
Reflecting the upbeat mood, copper prices rose with Shanghai prices hitting a
more than eight-year high, helped by the robust Chinese data.
Oil prices however were slightly lower after leading producers delayed talks on
2021 output policy, while the coronavirus pandemic continued to sap fuel demand.
OPEC+ delayed talks on output policy for next year until Thursday, three sources
told Reuters, as key players still disagreed on how much oil they should pump
amid weak demand/
Brent crude futures were 0.2% lower at $47.8 a barrel, while U.S. crude also
eased back to $45.31.
(Reporting by Danilo Masoni in Milan and Paulina Duran in Sydney; Editing by
Mike Collett-White)
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