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Asian shares hit record high amid economic recovery hopes

economic recovery

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.2%, South Korea added 2%, while Chinese blue chips advanced 0.3%

Asian shares resumed their ascent on Monday as investors pinned their hope on vaccines to eventually deliver a global economic upturn, even as a possible tightening in virus rules for Tokyo pulled Japanese stocks off 30-year highs.

After a slow start, MSCI’s broadest index of Asia-Pacific shares outside Japan swung 1.2% higher, hitting another all-time peak.

South Korea climbed 2% to a record, led by the chip and auto sectors, while Chinese blue chips added 0.3%.

E-Mini futures for the S&P 500 were steady after also touching a record high. EUROSTOXX 50 futures were flat, while FTSE futures rose 0.4%.

Investors are still counting on central banks to keep money cheap while coronavirus vaccines help revive the global economy over time, though much of that optimism is already priced in and the virus still spreading.

Japan’s Nikkei shed early gains, falling 0.4% after Prime Minister Yoshihide Suga confirmed the government was considering a state of emergency for Tokyo and three surrounding prefectures.

Chinese factory activity continued to accelerate in December, though the PMI missed forecasts at 53.0.

Japanese manufacturing stabilised for the first time in two years in December, while Taiwan picked up.

Investors are cautiously watching runoff elections in Georgia for two U.S. Senate seats on Tuesday that will determine which party controls the Senate.

If the Republicans win one or both, they will retain a slim majority in the chamber and can block President-elect Joe Biden’s legislative goals and judicial nominees.

Minutes of the Federal Reserve’s December meeting due on Wednesday should offer more detail on discussions about making their forward policy guidance more explicit and the chance of a further increase in asset buying this year.

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