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GLOBAL MARKETS-World stocks look to extend bull run to 12th day on economic optimism

Published 16/02/2021, 11:29 am
© Reuters.
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* MSCI ACWI has risen every single day so far in Feb

* Nikkei up 0.5%, Asian shares up 0.1%

* Oil rally fuelled by winter storm in Texas

* World FX rates http://tmsnrt.rs/2egbfVh

By Hideyuki Sano

TOKYO, Feb 16 (Reuters) - Global shares held firm on Tuesday, with a solid foundation in place to extend their bull run to a 12th consecutive session as optimism about the global economic recovery and expectations of low interest rates drive investments into riskier assets.

Oil prices soared to a 13-month high as a deep freeze due to a severe snow storm in the United States not only boosted power demand but also threatened oil production in Texas.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS ticked up 0.1% while Japan's Nikkei .N225 rose 0.4% to a 30-year high.

The mainland Chinese markets will remain closed for Lunar New Year through Wednesday while Wall Street was also closed on Monday.

S&P500 futures ESc1 traded 0.5% higher to a record level and MSCI's all country world index (ACWI), which has risen every single day so far this month, ticked up slightly.

"Global markets have started the week higher as investors remain confident that the pandemic will soon give way to an economic boom," wrote Mihir Kapadia, chief executive of Sun Global Investments in London.

"Unless any drastic moves take place this week, we could expect equity markets to remain strong."

Successful rollouts of COVID-19 vaccines in many countries are raising hopes of further recovery in economic activities hampered by range of anti-virus curbs.

U.S. President Joe Biden is pushing ahead with his plan to pump an extra $1.9 trillion in stimulus into the economy, in a further boost to market sentiment.

"The pace of the market's rally has been pretty fast but there's no denying that it's pretty comfortable time for stocks with expectations of low interest rates helping inflows to stocks," said Masahiro Ichikawa, chief strategist at Sumitomo Mitsui DS Asset Management.

The bullish view on the economy lifted bond yields, with the 10-year U.S. Treasuries gaining 5 basis points to 1.252% US10YT=RR in early Asian trade, its highest since late March.

Investors are looking to the minutes from the U.S. Federal Reserve's January meeting, due to be published on Wednesday, for confirmation of its commitment to maintain its dovish policy stance over the near future. That in turn is set to keep a tab on bond yields.

But some analysts say investors should keep a wary eye on bond yields.

"If U.S. bond yields keep rising, that could start to unsettle stocks," said Sumitomo Mitsui Asset's Ichikawa.

Oil prices soared to their highest in about 13 months as a U.S. winter storm added fuel to their rally on hopes of further demand recovery.

U.S. crude futures CLc1 traded up 1.1% at $60.11 per barrel.

Prices have rallied over recent weeks on tightening supplies, largely due to production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allied producers in the wider OPEC+ group of producers.

Rising oil prices supported commodity-linked currencies such as the Canadian dollar CAD=D4 while safe-haven currencies including the U.S. dollar took a back seat.

The British pound held firm at $1.3910 GBP=D4 , staying at its highest levels since April 2018.

The offshore Chinese yuan hit a 2-1/2-year high of 6.4010 per dollar overnight and last stood at 6.4032 CNH= .

MSCI's emerging market currency index .MIEM00000CUS hit a record high as well.

The yen weakened to 105.36 per dollar JPY= , edging closer to its four-month low of 105.765 set on Feb. 5. while the euro was little changed at $1.2129 EUR= .

Bitcoin traded at $48,204 BTC=BTSP , near its record high of $49,715 hit on Sunday.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates YTD

http://tmsnrt.rs/2egbfVh Global asset performance

http://tmsnrt.rs/2yaDPgn

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