Global stocks rise after Wall Street ends 2020 at new highs

BEIJING (AP) — Global stock markets and United States (US) futures rose yesterday on 2021’s first trading day, boosted by optimism about coronavirus vaccines after Wall Street ended the year on a new high.

London and Frankfurt opened higher while Shanghai, Hong Kong and Seoul advanced. Tokyo declined.

Optimism about vaccines outweighed concern about rising infection numbers in the US and some other countries and conflict over economic aid in Washington, said Stephen Innes of Axi in a report.

Traders are “perhaps a bit over-eager” but believe vaccines will “provide the ultimate economic kick-start, offering a massive booster shot to corporate profits”, said Innes.

In early trading, the FTSE 100 in London rose 1.5 per cent to 6,556.13 while the DAX in Frankfurt added 1.1 per cent to 13,869.71. The CAC 40 in France gained 1.4 per cent
to 5,628.05.

On Wall Street, futures for the benchmark S&P 500 index and Dow Jones Industrial Averages were 0.4 per cent higher.

Last Thursday, the S&P rose 0.6 per cent in 2020’s final trading day. It ended the year up 16.3 per cent, or a total return of about 18.4 per cent with dividends.

South Korean financial officers celebrate the opening for the Year 2021 trading outside Korea Exchange in Seoul, South Korea. PHOTO: AP

The Dow rose 0.7 per cent to a record. The Nasdaq composite added 0.1 per cent.

In Asia yesterday, the Shanghai Composite Index rose 0.9 per cent to 3,502.96 and the Hang Seng in Hong Kong added 0.9 per cent to 27,472.81.

The Nikkei 225 in Tokyo lost 0.7 per cent to 27,258.38 after Prime Minister Yoshihide Suga said a state of emergency was under consideration for the Japanese capital and three surrounding prefectures due to surging virus caseloads.

Suga called on restaurants to close by 8pm and said it would be difficult to restart a travel promotion programme that was suspended last month. He said the government would expedite approval of coronavirus vaccines and begin providing injections in February.

The Kospi in Seoul rose 2.5 per cent to 2,944.45 and Sydney’s S&P-ASX 200 added 1.5 per cent to 6,684.20.

India’s Sensex advanced 0.4 per cent to 48,055.61. Southeast Asian markets also rose.

Vaccine development by US, European and Chinese producers helped to buoy optimism that a return to normal might be closer after the global economy’s worst decline since the 1930s.

The US and Britain approved Pfizer Inc’s vaccine and Britain approved a second vaccine from AstraZeneca and Oxford University. China has given the greenlight for its first domestically developed vaccine. Others are being tested.

Governments might throw less stimulus at their economies than last year, but policy is “still at a very loose setting”, which supports stock prices and lending, said Kerry Craig of JP Morgan Asset Management in a report.

“Investors should look through the bumpier start to the new economic cycle and focus on the improved earnings outlook,” Craig said.

In energy markets, benchmark US crude gained 95 cents to USD49.47 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 12 cents on Thursday to USD48.52.

Brent crude, used to price international oils, added USD1.16 to USD52.96 per barrel in London. It rose 17 cents the previous session to USD51.80.

The dollar declined to JPY102.80 from Thursday’s JPY103.27. The euro rose to USD1.2282 from USD1.2211.