Asian shares slip as investors pause for breath after a long rally

Reuters WASHINGTON | Updated on November 26, 2020 Published on November 26, 2020

Asian shares dipped slightly on Thursday as the hot run up in global markets took a breather, with investors switching their focus from vaccine hopes to disappointing U.S. jobs data and new COVID-19 lockdowns.

Investors refrained from extending a rally in equities that had been fueled by vaccine optimism. Stocks neared but missed the previous session's record high, while oil continued to rise and the dollar lost some of its safe-haven lustre.

Japan’s benchmark Nikkei 225 gained 0.3% to 26,381.16 in morning trading. Australia’s S&P/ASX 200 slipped 0.2% to 6,669.70, but South Korea’s Kospi edged up 0.1% to 2,604.79. Hong Kong’s Hang Seng dipped nearly 0.1% to 26,647.35, while the Shanghai Composite was up 0.1% at 3,367.16.

Traders turned to riskier assets, including some funded in other currencies, following positive news about COVID-19 vaccines and a seemingly normal U.S. transition of power earlier this week.

Former Fed Chair Janet Yellen's reported nomination to Treasury Secretary has also emboldened those risk bets and further weighed on the dollar.

Australia's S&P/ASX 200 dipped 0.12%, while Japan's Nikkei 225 index slipped 0.16%.

Hong Kong's Hang Seng index futures were up 0.16%. E-mini futures for the S&P 500 fell 0.10%.

In currency markets, the risk-sensitive Australian dollar fell 0.01% versus the greenback to $0.736.

Figures from the US Labour Department's weekly jobless claims suggested that an explosion in new COVID-19 infections and business restrictions were boosting layoffs and undermining the labor market recovery.

MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.57%, having earlier hit a record high.

On Wall Street, the S&P 500 index and the Dow Jones Industrial Average 0.58%, the S&P 500 lost 0.16% and the Nasdaq Composite increased 0.47%.

Such optimism was reflected in a Reuters poll forecast on Wednesday that showed the rally in global stocks is expected to continue for at least six months.

The pan-European STOXX 600 index lost 0.08% and MSCI's gauge of stocks across the globe gained 0.04%.

Data showing a surprise drop in weekly U.S. crude inventories extended a rally in oil prices driven by hopes that a COVID-19 vaccine will boost fuel demand.

US crude recently rose 0.22% to $45.81 per barrel and Brent was at $48.90, up 2.17% on the day.

The dollar index fell 0.151%, with the euro up 0.03% to $1.1916.

Spot gold added 0.1% to $1,807.68 an ounce. U.S. gold futures gained 0.03% to $1,806.00 an ounce.

US financial markets will be closed on Thursday for the Thanksgiving holiday and U.S. bonds and stocks will trade on a partial schedule on Friday.

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Published on November 26, 2020
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