Actions mixed with stimulus hopes offset by COVID concerns

NEW YORK / LONDON (Reuters) – Global equity markets took no direction on Monday, with optimism about a US $ 1.9 trillion stimulus plan offset by rising COVID-19 cases and delays in supplies of vaccines.

Equity markets have climbed to record highs in recent days on bets that vaccines will start reducing infection rates around the world and a stronger US economic recovery under President Joe Biden.

However, investors are wary of the towering ratings amid questions about the effectiveness of vaccines in curbing the pandemic and as US lawmakers continue to discuss a coronavirus aid package.

“The risk to these markets is that, after an extraordinary couple of months, investors may start wondering if they look a bit frothy,” said Craig Erlam, senior market analyst at OANDA Europe.

US stocks were mixed at the start of trading.

At 10:33 am ET (1533 GMT), the Dow Jones Industrial Average fell 76.41 points, or 0.25%, to 30,920.57, the S&P 500 gained 15.93 points, or 0.41% , at 3,857.4 and the Nasdaq Composite added 165.34 points, or 1.22%, to 13,708.40.

The MSCI global equity index, which tracks shares from 49 nations, rose 2.24 points, or 0.34%, to 668.93.

MSCI’s broader index of Asia Pacific equities outside of Japan was up 11.48 points, or 1.6%, to 729.94.

European equity markets opened higher but then fell, with the pan-European STOXX 600 down 0.8%. A measure of the continent’s 50 largest stocks fell 0.6%. [.EU]

US investors are waiting for a busy week in earnings, with the tech giants Apple Inc, Facebook Inc, Tesla Inc and Microsoft Corp, all due to the results of the reports.

A rally in US tech stocks to near-record highs on Friday helped fuel gains in their counterparts in Asia and Europe. A European basket of tech stocks gained 0.5%. In Asia, Chinese tech giant Tencent was up 11%.

All eyes are on Washington, DC, as US lawmakers have agreed that providing COVID-19 vaccines to Americans should be a priority even if they’ve stuck their horns on the size of the pandemic relief package.

Financial markets have been keeping an eye on a huge package, even as the disagreements have meant months of indecision in a country suffering more than 175,000 cases of COVID-19 a day with millions of people out of work.

Global cases of COVID-19 are approaching 100 million, with over 2 million deaths.

Despite the recent outperformance of tech stocks, investors reiterated the view that cyclical and value stocks will outperform as economies recover.

“While renewed lockdowns and mobility restrictions around the world have supported home stay beneficiaries in 2020, we don’t think the cyclical rotation is over,” said Mark Haefele, chief investment officer of UBS Global Wealth Management. .

He said an expanding economic recovery, normalization of economic activity as vaccination programs continue and attractive valuations for emerging market stocks versus developed markets were the reasons UBS shifted its preference to emerging markets. .

Sentiment in Asia was bolstered by a report that China had overtaken the US as the top recipient of FDI in 2020, with $ 163 billion in inflows.

MSCI’s broader index of Asia-Pacific equities outside of Japan increased 1.6%.

The Japanese Nikkei has rebounded from it decreases in the first trades up to 0.7%.

Australian stocks added 0.4% after the country’s drug regulator approved the Pfizer / BioNTech COVID-19 vaccine with a phased rollout likely late next month.

Chinese equities rose, with the blue chip CSI300 index up 1%. Hong Kong’s Hang Seng Index jumped 2.4% led by tech stocks.

The dollar index, which tracks the greenback against a basket of six currencies, rose 0.223 points, or 0.25 percent, to 90.461. Major trading currency pairs were trapped in a tight range as markets awaited Wednesday’s Federal Reserve meeting.

The euro fell 0.41%, to $ 1.2120.

In commodities, Brent last fell $ 0.05, or 0.09%, to $ 55.36 a barrel. US crude fell $ 0.04, or 0.08%, to $ 52.23 a barrel.

Spot gold prices rose $ 4.21, or 0.23%, to $ 1,856.76 per ounce.

Reporting by Matt Scuffham; Editing by Dan Grebler