By Swati Pandey
SYDNEY (Reuters) – Asian stocks began cautiously jittering over high ratings on Monday, though sentiment was bolstered by hopes of coronavirus after the U.S. Food & Drug Administration (FDA) authorized the use of recovering patients’ blood plasma as a treatment option.
The US FDA’s announcement of a so-called “emergency use authorization” came on the eve of the Republican National Convention, where Donald Trump will be nominated to lead his party for another four years.
MSCI’s broadest index of stocks in the Asia-Pacific outside Japan was down 0.04% last week, but not too far from a six-month high last week.
Australian shares were flat, while Japanese Nikkei reversed around early losses to finally be 0.07%. South Korea’s KOSPI, which has been on a slippery slope since hitting a two-year high earlier this month, was mildly positive.
E-Mini futures for the S & P500 added 0.2%. Analysts cautioned with Wall Street indices already at record highs, even as the world economy struggled to recover from the coronavirus pandemic.
“Beyond new highs on tech-driven indices, most markets and equities sectors are quietly seeing an array of low-intensity concerns about global growth,” said JPMorgan cross-asset analyst John Normand.
“With risks increasing and September a full month for policy, the end of the summer is a good time to cross-check valuations and consider both threats and opportunities.”
Normand pointed to talks on a fiscal package in the US, the Fed’s forthcoming policy review next month and the promotion of the US election campaign as a risk event over the coming weeks.
Major arrived this week was a highly anticipated address by Federal Reserve Chairman Jerome Powell at the Kansas City Fed Jackson Hole symposium, where he will discuss the evaluation of the Fed’s monetary policy framework.
“This adds even more importance to the market’s obvious disappointment last week,” said Ray Attrill, head of forex strategy at Melbourne-based National Australia Bank.
The minutes of the July meeting of the Fed last week made little mention of its policy release, while “did not live up to expectations” that its meeting in September would reveal a formal commitment for new outcome-based ‘forward guidance,’ he added. Attrill.
In currency, the dollar rose on the safe haven Japanese yen to 105.90.
The British pound lost losses after falling 0.9% on Friday due to lack of progress in talks following the Brexit trade with the European Union. It was last priced at $ 1.3089.
Also on Friday came news that Britain’s public debt exceeded £ 2 trillion ($ 2.65 trillion) for the first time in July when the government raised public spending to curb the coronavirus pandemic and tax revenues fell.
The euro was defensive at $ 1.1792 after falling 0.5% on Friday after disappointing data on manufacturing activity.
That did not change the dollar index to 93.22.
In commodities, oil prices rose on Monday, with Brent crude rising 9 cents to $ 44.44 a barrel and US crude climbing 9 cents to $ 42.43.
Gold saw some selling pressure with spot prices down 0.3% at 1,933.09 an ounce.
(Report by Swati Pandey; Edited by Shri Navaratnam)
