Equities rally on pandemic recovery

WASHINGTON (AFP) — Equities pushed higher Tuesday fueled by the overarching theme of vaccine rollouts, slowing infections and the easing of lockdowns, as well as optimism President Joe Biden will soon be able to sign off on a vast US stimulus package.

Oil also held on to gains around 13-month highs as a severe cold snap in Texas combined with expectations of a surge in demand in line with the reopening of economies.

Rapid vaccine uptake means consensus is aligned to a surge in economic activity and strong profit recovery.

With Britain and the United States leading the way in rolling out vaccines at the same time as they see a sharp slowdown in new cases and deaths, there are growing calls for governments to lift strict containment measures and get life back to a semblance of normal.

The United States on Sunday reported its lowest daily infection number since October, as Britain easily hit a key target for immunizing its highest-risk people, while the European Union — which is struggling with its vaccine program — has ramped up plans to deliver more jabs.

“Rapid vaccine uptake means consensus is aligned to a surge in economic activity and strong profit recovery,” said Axi strategist Stephen Innes.

He added that with the Federal Reserve’s ultra-loose monetary policies and Biden’s stimulus on the way, “it certainly feels like the path of least resistance remains higher, as calls grow more vocal for an increase in the pace of reopening and the positive implications that would have for some areas of the market.”

While Biden’s spending package is widely expected to pass through the Democrat-controlled Congress, analysts have warned it might not be as big as the $1.9. trillion he proposed, though it is still expected to be north of a trillion.

Texas cold snap

Hong Kong jumped 1.9 percent to levels last seen in June 2018 as traders returned from an extended holiday weekend, while Tokyo was also more than one percent higher a day after breaking 30,000 points for the first time in three decades.

Wellington rebounded from a steep loss after New Zealand’s government said there had been no reports of community transmission of the virus in Auckland, with the city in lockdown following the discovery of the UK strain.

Sydney, Seoul, Singapore, Bangkok, Manila and Jakarta were also higher but Mumbai fell. Shanghai and Taipei were closed for holidays.

London, Paris and Frankfurt all rose at the open.