Asian Stocks Dip as Investors Curb Vaccine Enthusiasm

Photo: Reuters

NEW YORK (Reuters) - Asian stocks came under pressure on Tuesday following a mixed Wall Street session, as concerns about increasing COVID-19 deaths, infections and lockdowns overshadowed optimism about the start of coronavirus vaccinations.

Australian S&P/ASX 200 lost 0.12% in early trading while Japan's Nikkei 225 futures fell 0.13%.E-mini futures for the S&P 500 rose 0.21%.

The lackluster start to the Asian day comes after the S&P 500 closed down 0.4%, the Nasdaq Composite gained 0.5% and the Dow Jones Industrial Average hit a record high but fell back 0.6% for the day.

The first U.S. vaccination was given to an intensive care nurse on Monday, the same day the country passed the grim milestone of 300,000 lives lost. COVID-19 deaths in the U.S. are occurring at a record rate 2,462 per day on a seven-day average, according to a Reuters count.

Meanwhile, new waves of the pandemic forced Germany, the Netherlands and London back to stricter lockdowns while cases in Japan and South Korea also surged. Some traders said markets have already factored in optimism about vaccines.

"We've been trading off the same vaccine headlines for three or four months," said Dennis Dick, a trader at Bright Trading LLC. "This market is 100% relying on this vaccine."

Still, negotiators in the U.S. Congress appeared to be finally near an agreement on Monday on a massive government spending deal with a fresh round of aid to help the economy.

In foreign exchange markets, the British pound held its 1.2% gains against the dollar after the U.K. and Europe agreed to continue Brexit talks. The pound was last up 0.04% to $1.3327 and the dollar continued to hover near two-year lows.

U.S. Treasury yields were relatively stable ahead of the Federal Reserve's two-day policy meeting on Tuesday. The benchmark 10-year yield on Monday afternoon was last at 0.898%, within last week's trading range. The yield curve steepened modestly with the spread between two-year and 10-year yields rising to 77.9 basis points.

The Federal Reserve meeting is mostly expected to end with nothing more than refinements to its strategy of holding down interest rates to support the economy through the pandemic.

The Bank of England and the Bank of Japan also close out their 2020 meetings this week.

Gold prices slid on Monday in another day in which the prospects for vaccinations seemed to weigh on its appeal as a safe haven from economic trouble. Spot gold was 0.1% lower at $1,828.94 per ounce late on Monday.

Oil prices were little changed in choppy trading on Monday as persistent oversupply in the market largely offset hopes that a rollout of coronavirus vaccines will lift global fuel demand.

Reprinted from Reuters. The copyright is reserved by the original author.