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SYDNEY: Asian stocks fell from an all-time high on Monday after a Reuters report that the United States was preparing to impose sanctions on some Chinese officials highlighted geopolitical tensions, while oil prices fell due to rising cases. virus.
MSCI’s broader Asia-Pacific equity index outside of Japan fell 0.3% after four straight sessions of gains.
It’s still 16% more so far this year, the best since a 33% increase in 2017.
China’s first class index fell 0.6% while Hong Kong’s Hang Seng fell 1.2%. Japan’s Nikkei fell 0.3% while Australian stocks rose 0.5%. E-Mini futures for the S&P 500 fell 0.1% after starting higher.
The sell-off began after Reuters exclusively reported, citing sources, that the United States was preparing sanctions against at least a dozen Chinese officials for their alleged role in Beijing’s disqualification of Hong Kong-elected opposition lawmakers.
The move comes as President Donald Trump’s administration maintains pressure on Beijing in his final weeks in office.
Asian markets had initially started the week on a positive note in hopes of a faster global recovery as coronavirus vaccines are rolled out, starting this week in Britain.
The US authorities will also discuss the program this week ahead of the first round of vaccinations scheduled for this month.
He hopes vaccines will help curb the pandemic that has so far killed more than 1.5 million people worldwide and stocks have soared in recent weeks.
On Wall Street, stock indices hit new all-time highs on Friday with the Dow rising 0.8%, the S&P 500 gaining 0.9% and the Nasdaq 0.7%.
“The vaccine will break the link between mobility and infection rate, allowing for the highest global GDP growth in more than two decades,” JPMorgan analysts wrote in a note, forecasting 4.7% global growth in 2021.
“Following the second waves through October and November, economic activity has surprised to the upside. This is true in both Europe and the United States. This may be the reason why financial markets have largely ignored the increase in cases, hospitalizations and deaths “.
Still, expectations for a stimulus in the US accelerated after last week’s weak payroll data, following months of stalled negotiations.
The US economy added the fewest workers in six months in November, and nonfarm payrolls increased by 245,000 jobs last month, well below expectations for a 469,000 increase.
A bipartisan group of Democrats and Republicans proposed a $ 0.9 trillion compromise package that leaders on both sides seem willing to accept.
In currencies, investors’ focus is on a last-ditch attempt by Britain and the European Union to strike a post-Brexit trade deal this week, likely with just a few days for negotiators to avoid a chaotic parting of the ways to the end of the year.
If there is no deal, a five-year Brexit divorce will end in disarray just as Britain and its former EU partners grapple with the severe economic cost of the COVID-19 pandemic.
The pound was down 0.06% to $ 1.3429, while the single currency was up 0.1% to $ 1.2132, not far from the April 2018 high of $ 1.2177.
The risk-sensitive Australian dollar barely changed at $ 0.7427.
That left the US dollar down 0.1% to 90,715 against a basket of major currencies, after hitting a 2.5-year low last week.
In commodities, oil prices fell from their highest levels since March as a continued rise in the coronavirus globally forced a series of renewed lockdowns, including tough new measures in Southern California.
US crude was down 22 cents to $ 46.04 a barrel and Brent was down 19 cents to $ 49.06. Brent has lost about a quarter of his value this year so far.
Spot gold, which hit a record $ 2,072.49 an ounce, last stood at $ 1,837.4, still a hefty 21% this year. – Reuters
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