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Asian stocks dip as investors curb vaccine enthusiasm
The lackluster start to the Asian day comes after the S&P 500 closed down 0.4 percent, the Nasdaq Composite gained 0.5 percent and the Dow Jones Industrial Average hit a record high but fell back 0.6 percent for the day.
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Volatility looms: Pedestrians walk past a stock indicator board showing share prices of the Tokyo Stock Exchange (left) and the New York Dow (right) in Tokyo in this file photo. (AFP/Kazuhiro Nogi)
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sian stocks came under pressure on Tuesday following a mixed Wall Street session, as concerns about increasing COVID-19 deaths, infections and lockdowns overshadowed optimism about the start of coronavirus vaccinations.
Australian S&P/ASX 200 lost 0.12 percent in early trading while Japan’s Nikkei 225 fell 0.18 percent. E-mini futures for the S&P 500 rose 0.21 percent. The Jakarta Composite Index (JCI) slightly gained 0.08 percent on Tuesday's opening.
The lackluster start to the Asian day comes after the S&P 500 closed down 0.4 percent, the Nasdaq Composite gained 0.5 percent and the Dow Jones Industrial Average hit a record high but fell back 0.6 percent for the day.
The first United States vaccination was given to an intensive care nurse on Monday, the same day the country passed the grim milestone of 300,000 lives lost.
Read also: Window dressing, hopes of vaccine push JCI back to 6,000
COVID-19 deaths in the US are occurring at a record rate 2,462 per day on a seven-day average, according to a Reuters count.
Meanwhile, new waves of the pandemic forced Germany, the Netherlands and London back to stricter lockdowns while cases in Japan and South Korea also surged.
Some traders said markets have already factored in optimism about vaccines.
“We’ve been trading off the same vaccine headlines for three or four months,” said Dennis Dick, a trader at Bright Trading LLC. “This market is 100 percent relying on this vaccine.”
Still, negotiators in the US Congress appeared to be finally near an agreement on Monday on a massive government spending deal with a fresh round of aid to help the economy.
In foreign exchange markets, the British pound held its 1.2 percent gains against the dollar after the UK and Europe agreed to continue Brexit talks.
The pound was last up 0.04 percent to US$1.3327 and the dollar continued to hover near two-year lows.
US Treasury yields were relatively stable ahead of the Federal Reserve’s two-day policy meeting on Tuesday.
Read also: Lawmakers push bipartisan US stimulus plan to break stubborn deadlock
The benchmark 10-year yield on Monday afternoon was last at 0.898 percent, within last week’s trading range. The yield curve steepened modestly with the spread between two-year and 10-year yields rising to 77.9 basis points.
The Fed meeting is mostly expected to end with nothing more than refinements to its strategy of holding down interest rates to support the economy through the pandemic.
The Bank of England and the Bank of Japan also close out their 2020 meetings this week.
Gold prices slid on Monday in another day in which the prospects for vaccinations seemed to weigh on its appeal as a safe haven from economic trouble. Spot gold was 0.1 percent lower at $1,828.94 per ounce late on Monday.
Oil prices were little changed in choppy trading on Monday as persistent oversupply in the market largely offset hopes that a rollout of coronavirus vaccines will lift global fuel demand.
