Stocks and oil ride high on Biden transition and vaccine hopes

Stocks, oil and risk currencies gained on Tuesday as the formal go-ahead for U.S. President-elect Joe Biden to begin his transition burnished a November already boosted by COVID-19 vaccines.

European markets tracked gains in Asian and U.S. equities, with the broad-based STOXX 600 index opening 0.8% higher and Brent crude climbing to its highest level since March at $46.38 a barrel. Safe haven assets such as gold fell.

Stocks

  • Japan’s Nikkei jumped 2.5% to its highest level since May 1991 overnight, with energy, real estate and financial shares leading the advance.
  • Asia-Pacific shares outside Japan had ticked up 0.4%. Australia’s S&P/ASX 200 was 1.26% stronger, touching its highest level in almost nine months, with energy stocks leading the pack there.
  • Seoul’s Kospi was 0.6% higher as was Hong Kong’s Hang Seng which rose 0.4%. China blue-chips were an outlier however, edging down 0.6%, as investors booked profits following recent strong gains.

Currency and Commodities

  • The euro was gaining towards $1.19 again and the dollar index, which tracks the greenback against a basket of six major rivals, nudged down to 92.235.
  • Also spurred on by the vaccine hopes, oil reached levels not seen since before the coronavirus began to spread rapidly in March and decimated demand.
  • Brent crude futures rose 45 cents, or 1%, to $46.51 a barrel to add to a more than 20% surge this month, while U.S. West Texas Intermediate crude added 46 cents, or 1.1%, to $43.52.
  • Gold continued to lose its shine too, falling to $1,826.3 an ounce having now dropped 10% this month.

Bonds

  • In the bond markets, the yield on the benchmark 10-year notes rose slightly to 0.87% as did those on most European government bonds.
  • Germany’s 10-year yield was up 1 basis point to -0.57% in early trade.