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GLOBAL MARKETS-Asian shares slip as investors pause for breath after massive rally

Published 26/11/2020, 11:31 am
© Reuters.
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(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.)

* MSCI's all-country stock index hits record before slipping

* Indexes: Dow down 0.58%, S&P off 0.16%, Nasdaq up 0.47%

* 2020 asset performance http://tmsnrt.rs/2yaDPgn

* Global stock market outlook: https://tmsnrt.rs/3nT0J5r

By Katanga Johnson

WASHINGTON, Nov 25 (Reuters) - Asian shares dipped slightly on Thursday as the hot run up in global markets took a breather, with investors switching their focus from vaccine hopes to disappointing U.S. jobs data and new COVID-19 lockdowns.

Investors refrained from extending a rally in equities that had been fueled by vaccine optimism. Stocks neared but missed the previous session's record high, while oil continued to rise and the dollar lost some of its safe-haven luster.

Traders turned to riskier assets, including some funded in other currencies, following positive news about COVID-19 vaccines and a seemingly normal U.S. transition of power earlier this week.

Former Fed Chair Janet Yellen's reported nomination to Treasury Secretary has also emboldened those risk bets and further weighed on the dollar.

Australia's S&P/ASX 200 .AXJO dipped 0.12%, while Japan's Nikkei 225 index .N225 slipped 0.16%.

Hong Kong's Hang Seng index futures .HSI .HSIc1 were up 0.16%. E-mini futures for the S&P 500 EScv1 fell 0.10%.

"In the very short-term, there's a strong argument that we're due for a pullback in risk assets: market internals are looking overstretched, the technicals suggest slightly overbought conditions and expectations of some pretty heavy end of month portfolio rebalancing looks likely to curtail upside momentum in stocks," said IG Australia markets analyst Kyle Rodda.

In currency markets, the risk-sensitive Australian dollar fell 0.01% versus the greenback to $0.736.

Figures from the U.S. Labor Department's weekly jobless claims suggested that an explosion in new COVID-19 infections and business restrictions were boosting layoffs and undermining the labor market recovery. L1N2IA2AX

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.57%, having earlier hit a record high.

On Wall Street, the S&P 500 index .SPX and the Dow Jones Industrial Average .DJI 0.58%, the S&P 500 .SPX lost 0.16% and the Nasdaq Composite .IXIC increased 0.47%.

"But sentiment overall remains very bullish...the hope for a return to normal economic activity in 2021 is giving the markets all it needs to continue take on risk, with only a completely unforeseen event likely to kill that trend from here," Rodda said.

Such optimism was reflected in a Reuters poll forecast on Wednesday that showed the rally in global stocks is expected to continue for at least six months. pan-European STOXX 600 index .STOXX lost 0.08% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.04%.

"I think a lot of people got ahead of themselves imagining that the recovery was taking shape. To me the recovery isn't taking shape until we have a viable vaccine," said Justin Lederer, Treasury analyst and trader at Cantor Fitzgerald.

Data showing a surprise drop in weekly U.S. crude inventories extended a rally in oil prices driven by hopes that a COVID-19 vaccine will boost fuel demand.

U.S. crude CLc1 recently rose 0.22% to $45.81 per barrel and Brent LCOc1 was at $48.90, up 2.17% on the day.

The dollar index =USD fell 0.151%, with the euro EUR= up 0.03% to $1.1916.

Spot gold XAU= added 0.1% to $1,807.68 an ounce. U.S. gold futures GCc1 gained 0.03% to $1,806.00 an ounce.

U.S. financial markets will be closed on Thursday for the Thanksgiving holiday and U.S. bonds and stocks will trade on a partial schedule on Friday.

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http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar

http://tmsnrt.rs/2egbfVh Emerging markets

http://tmsnrt.rs/2ihRugV MSCI All Country Wolrd Index Market Cap

http://tmsnrt.rs/2EmTD6j

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