World Shares Rise on Recovery Hopes after Stellar November
On Tuesday, world shares rose to just shy of record peaks after expectations of a recovery from the coronavirus downturn got a solid boost due to robust China data. In addition, authorities are looking to continue with the stimulus support and drugmakers are also seeking quick approval of their respective vaccines. The dollar was weighed down by the prospect of additional easing by the Federal Reserve in the United States for helping the fragile economy through the winter. Meanwhile, there was an increase in riskier currencies, but crude prices missed out on an increase after a decision for output cuts was delayed by OPEC+ countries.
Tracking shares of 49 countries, the world equity index of the MSCI had increased by 0.4%. Last month, breakthroughs in the development of COVID-19 vaccines from top companies like Moderna, Pfizer and AstraZeneca, along with a market-friendly result in the US presidential elections allowed the index to increase by 12% to new all-time highs and also record its best month ever. Analysts said that the rally just might continue, if the vaccine rollouts are made in a timely manner and widespread availability becomes possible by the second half of 2021. They also said that a divided US government, which seemed highly likely, wouldn’t be an impediment for a rising market.
In Europe, there was a 0.6% increase in the pan-regional STOXX 600 index in early deals, whereas US stock index futures also had a strong start on Wall Street, as investors were focused on November manufacturing surveys for the US and Europe. There had been an increase of 1.3% in the MSCI index of Asia-Pacific shares, outside of Japan, and a 2.2% jump in China’s CSI300 index. This was after a business survey showed that the activity in the country’s factory sector had increased at its fastest pace in November in over a decade.
There was a 1.1% jump in Japan’s Nikkei and a similar rise in Australia’s S&P/ASX 200 after the country’s central bank said that Australia’s economy would need monetary and fiscal support for a while. Analysts said that the upward trend was once again reasserting itself, considering the growth in China, the positive news in regard to a vaccine, and the huge faith in the ability of central banks of keeping the markets running. Moderna Inc. has applied for emergency authorization in the US for its vaccine after the complete results of a late-stage study indicated that it was 94.1% effective and did not have any safety concerns.
The dollar remained under pressure in the foreign exchange market, after it ended its worst month since July, and it is not expected to let up because even more US monetary easing is expected by investors. The dollar index had declined by 0.3% and was trading at 91.706. On Monday, in a speech, the chair of the Federal Reserve said that a surging pandemic and a slowing recovery meant that the next few months were going to be challenging for the United States, with hurdles still in the way of the deployment of a vaccine.