Asia Stocks Look Up as Global Markets Show Confidence in Economic Growth

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NEW YORK (Reuters) - Asian stocks were poised for gains on Wednesday as global markets moved with confidence that vaccinations and additional monetary and fiscal support from governments will drive economic growth.

Australian S&P ASX 200 futures rose 0.77% in early trading. Japan's Nikkei 225 futures added 0.04%. E-mini futures for the S&P 500 rose 0.05%.

The day started with momentum from gains on Tuesday in U.S. and European stocks, gold, oil and U.S. Treasury yields. Optimism for a trade deal on Brexit contributed to a weaker dollar against the British pound and the euro.

"Tighter lockdowns will impact short-term economic activity but Brexit talks and the US aid package discussions remain alive providing a degree of longer-term optimism," strategists at ANZ Research wrote.

Goldman Sachs strategists said, "This remains a friendly backdrop for cyclical and risky assets."

Markets will now look to the U.S. Federal Reserve (Fed) for new projections on whether the economy will suffer a double-dip recession or is on the cusp of a vaccine-inspired boom. The central bank is to release a statement on Wednesday, with a press conference set for the afternoon.

Some analysts expect Fed Chairman Jerome Powell will underscore the increasing short-term risks to the U.S. economy.

The Fed could also give guidance on when and how it might change its bond purchases, impacting views on longer-term yields and exchange rates.

On Tuesday, the Dow Jones Industrial Average rose 1.13% to 30,199.31 points. The S&P 500 gained 1.29% and the Nasdaq Composite climbed 1.25% to 12,595.06, exceeding its previous record close on Dec 8.

The pan-European STOXX 600 index rose 0.25%.

Economically sensitive U.S. stock sectors, including consumer discretionary and materials, led gains as some investors viewed the recent spike in coronavirus infections and deaths and the grim November jobs report as drivers of a COVID-19 relief and stimulus bill.

Optimism over a $1.4 trillion U.S. spending package increased after House of Representatives Speaker Nancy Pelosi invited other top congressional leaders to meet late on Tuesday to hammer out a deal to be enacted this week.

Progress on vaccine rollouts continued on Tuesday after Moderna Inc's COVID-19 vaccine appeared set for regulatory authorization this week. The U.S. also expanded on Tuesday its rollout of the newly approved vaccine developed by Pfizer Inc. and BioNTech SE.

Expectations U.S. government spending drove spot gold up as much as 1.4% on Tuesday afternoon to $1.852.36 per ounce as U.S. Gold futures settled up 1.3% at $1,855.30.

Gold, regarded as a hedge against inflation and currency debasement, has risen over 22% so far this year amid unprecedented government stimulus globally.

Despite a report from the International Energy Agency that any impact of vaccines on oil demand is several months away, Brent crude oil on Tuesday afternoon gained 30 cents to $50.59 a barrel and U.S. West Texas Intermediate crude rose 43 cents to $47.42.

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