COVID recovery trade buoys share, ignite goods

LONDON (Reuters) – European equities flirted with one-year highs on Tuesday, the recovery of hopes that the rollout of the COVID-19 vaccine and a huge US stimulus package will result in a lasting economic recovery and draw a line under a year of lockdowns .

FILE PHOTO: London Stock Exchange Group offices seen in City of London, UK, December 29, 2017. REUTERS / Toby Melville

Oil prices jumped to a 13-month high as a deep freeze due to a severe snowstorm in the US that not only increased demand for power but also threatened oil production in Texas.

Bitcoin traded at $ 49,072.84 in Europe after hitting a new record-high $ 60 shy of $ 50,000 earlier in the day.

The pan-European STOXX 600 rose 0.19% after hitting its highest Monday since the end of February 2020.

“The big picture is that there is an awful lot of enthusiasm for recovery when it comes to the vaccine program,” said Michael Hewson, Chief Market Analyst at CMC Markets.

The prospects for economic recovery are bright with $ 8,384.50 copper commodities, after hitting the highest level since May 2012. The European Mining Index was at its highest level since July 2011.

Hospitality stocks could see more gains as restaurants, hotels and pubs reopen in the coming weeks. They should do well on the back of the “staycation” deal, Hewson said.

EU fourth-quarter GDP figures and Germany’s Zew economic sentiment data were on Tuesday.

But Hewson said most investors ignored numbers for past economic performance and chose to look ahead to recovery amid a easing of lockdown restrictions over the summer.

“Markets started the week in a risky mood in light of positive news about the rollout of the vaccine. Risky assets continued to rise with equities performing well in Europe, ”said UniCredit analysts in a note.

The euro climbed 0.2% higher to $ 1.2149.

On Wall Street, the S & P500 futures rose 0.46%. US 10-year government interest rates touched 1.25% for the first time in almost a year.

The US dollar at 90,229 was lowered to a three-week low as growing optimism about recovery sent investors into more risky currencies, including the euro and the British pound.

US 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.

NIKKEI RALLY

The market sentiment in Europe was helped by overnight gains in Asian equities, with Japan’s Nikkei blue chip index rising 1.28% at a 30-year high.

MSCI’s broadest index of Asia-Pacific equities outside Japan rose 0.44%.

In Hong Kong, the Hang Seng Index rose 1.9% to a 32-month high, while Australia’s S & P / ASX200 rose 0.7%. The Chinese markets on the mainland remain closed during the holidays until Thursday.

Word Minnett adviser John Milroy said while stock markets were positive, investors were wary of future inflation risk due to central bank and government stimulus programs that exist worldwide.

“There is a clear sense of interest rates remaining low for some time yet, and investors’ appetite for equities to remain strong, we are likely to see markets hold up for some time to come,” Milroy told Reuters.

The bullish view of the economy raised bond yields, with 10-year US government bonds rising to 1.23%, the highest since the end of March.

Investors are looking at the minutes of the US Federal Reserve’s January meeting, published on Wednesday, to confirm that they are committed to maintaining its deaf policy stance in the near future. It is again set to keep track of bond yields.

Brent crude was flat at $ 63.28 a barrel, after rising to its highest level since January 2020 in the previous session. US West Texas Intermediate (WTI) crude futures rose 60 cents or 0.7% to $ 59.89 per share. Barrel.

Further reporting by Tomo Uetake in Sydney; Edited by Shri Navaratnam, Richard Pullin and Nick Macfie

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