Markets stable while Europe is on course for its best month in nearly three decades
World stock markets grabbed a well-earned breather on Tuesday after a second major coronavirus vaccine boost in the space of a week had propelled them higher again and put Europe on course for its best month in nearly three decades.
The pan-European STOXX 600 dipped 0.2% in early moves but there was little sign of an end to the November bull run that has also seen confidence-sensitive commodities and emerging markets surge. MSCI’s main 49country world stocks index was perched at a record high having risen 11% and all but once this month, while China’s yuan hit a near 2-1/2 year peak in the currency markets as the U.S. dollar continued to sag. Investors are in “full bull” mode, BofA’s monthly investor survey showed on Tuesday.
With global economic growth and profit expectations running at a 20-year high among those the bank surveyed, the “reopening rotation” back into coronavirus-hit sctors is likely to continue for the rest of the year, BofA added, although they did also recommend cashing in in the coming weeks or months. The latest boost come from Moderna MRNA.O which said on Monday its experimental COVID-19 vaccine was 94.5% effective in preventing infection based on interim late-stage data. The U.S.based firm became the second drugmaker, after Pfizer, to announce promising data. Its shares gained 9.6% on the day.
MSCI's broadest index of AsiaPacific shares outside Japan gained 0.2% overnight, a day after hitting its highest level since launching in 1987. Japan's Nikkei 225 rose 0.4% after hitting a 29year high the day before, but Chinese blue chips dipped as recent bond defaults hit sentiment.
The positive vaccine news helped oil prices add to their 16% November gains. U.S. crude inched up to $41.57 per barrel after rising 3.02% on Monday, and Brent gained 0.7% after a 2.43% jump the day before.
Other economically sensitive sectors such as oil and gas and automakers retreated after a sharp rally in the past week as hopes of a vaccine prompted investors to bet on a faster economic recovery.