Asian markets step back from stimulus-driven record highs

Reuters SYDNEY | Updated on January 22, 2021

File Photo   -  Bloomberg

MSCI ex-Japan tad weaker after hitting record highs on Thursday

Asian shares eased from record highs on Friday as investors took some money off the table after a recent rally that was driven by hopes a massive US economic stimulus plan by incoming President Joe Biden will help temper the COVID-19 impact.

"The markets had such a strong run yesterday after the presidential inauguration in the US and the run-up to that, that the lead coming in from the US is a bit messy," said Shane Oliver, chief economist at investment manager AMP Capitalin Sydney.

Australia's benchmark index was down 0.2% while Japan's Nikkei eased 0.4%.

Chinese shares started on the backfoot with the blue-chip CSI300 index down 0.1% and Hong Kong's Hang Seng was off 0.1%.

Overnight on Wall Street, both the S&P 500 and Nasdaq Composite closed at record highs.

MSCI's broadest gauge of Asia Pacific stocks outside of Japan was off 0.2% at 722.49 points, a whisker away from its all-time high of 727.31 touched on Thursday.

The index has jumped 3.7% so far this week, reflecting relief over an orderly transition of power in the United States and strong expectations that US stimulus will provide continued support for global assets.

Democrats took control of the US Senate on Wednesday, though they will still need Republican support to pass the program.

In currency markets, the U.S. dollar picked up against a basket of currencies after three straight days of losses. It is down 0.7% so far this week.

Against the Japanese yen, the dollar has slipped 0.25% sofar this week.

The commodity-sensitive Australian dollar is up 0.6% this week while the euro has climbed 0.7% in the period.

Published on January 22, 2021

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