Monday, February 1, 2021

Asia shares slip for fifth session, silver gets retail boost

Dealers were also warily awaiting new developments in the headline-grabbing battle between retail investors and funds that specialise in shorting stocks. — Reuters pic
Dealers were also warily awaiting new developments in the headline-grabbing battle between retail investors and funds that specialise in shorting stocks. — Reuters pic

SYDNEY, Feb 1 — Asian shares wavered today amid worries that problems with vaccine rollouts combined with new strains of Covid-19 will delay a global economic recovery that has already been baked into the market’s rich valuations.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.4 per cent, following four straight sessions of losses. Japan’s Nikkei bounced 0.4 per cent, after shedding almost 2 per cent on Friday.

Futures for the S&P 500 lost another 0.7 per cent in heavy trade, while NASDAQ futures fell 0.9 per cent.

Dealers were also warily awaiting new developments in the headline-grabbing battle between retail investors and funds that specialise in shorting stocks.

US hedge funds bought and sold the most stock in more than 10 years amid wild swings in GameStop Corp, according to an analysis by Goldman Sachs Inc

Talk today was that silver was the new target for the retail crowd as the metal jumped 5.7 per cent to a six-month high .

Yet many analysts see this entertaining episode as a sideshow compared to signs of a loss of momentum in the United States and Europe as coronavirus lockdowns bite.

Indeed, a survey from China yesterday showed factory activity grew at the slowest pace in five months in January as restrictions took a toll in some regions.

Neither was the news on vaccine rollouts positive, especially given doubts about whether they will work on new Covid strains.

“It is these considerations, not what is happening to a video gamer retailer day to day, that has weighed on risk assets,” said John Briggs, global head of strategy at NatWest Markets. “So much of the market’s valuations, risk in particular, is premised on the fact we can see a light at the end of the Covid tunnel.”

Doubts have also emerged about the future of President Joe Biden’s US$1.9 trillion (RM7.68 trillion) relief package, with 10 Republican senators urging a US$600 billion plan.

The jitters in stocks caused only a brief ripple in bonds with Treasury yields actually rising late last week, perhaps a refection of the tidal wave of borrowing underway.

A record US$1.11 trillion of gross Treasury issuance is slated for this quarter, up from US$685 billion the same time last year.

Early today, US 10-year yields held at 1.07 per cent and near the recent 10-month top of 1.187 per cent.

Higher yields combined with the more cautious market mood have seen the safe-haven dollar steady above its recent lows. The dollar index stood at 90.628, having bounced from a trough of 89.206 hit early in January.

The euro idled at US$1.2121, well off its recent peak at US$1.2349, while the dollar held firm at ¥104.74.

Gold followed silver higher to US$1,853 an ounce, but has repeatedly stalled at resistance around US$1,875.

Global demand concerns kept oil prices in check. US crude eased 30 cents to US$51.90 a barrel, while Brent crude futures dropped 20 cents to US$54.84. — Reuters




Source: Malay Mail

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