Reuters - Asia share indexes rose Monday as concerns over rising COVID-19 cases and delays in vaccine supplies were eclipsed by expectations of a $1.9 trillion fiscal stimulus to help revive the U.S. economy.
World equity markets have scaled highs in recent days on bets COVID vaccines will start to reduce infection rates worldwide and on a stronger U.S. economic recovery under President Joe Biden.
Still, investors are also wary about towering valuations and questions over the efficiency of the vaccines in curbing the pandemic and as U.S. politicians continue to debate a coronavirus aid package.
MSCI's broadest index of Asia-Pacific shares outside Japan rose to 721.96 and just shy of last week's record high of 727.31.
The benchmark is up 8.5% so far in January, on track for its fourth straight monthly rise.
Japan's Nikkei rebounded from falls in early trading to be up 0.36%.
Australia shares were slightly higher, too, after the country's drug regulator approved the Pfizer/BioNTech COVID-19 vaccine with authorities saying a phased rollout will begin late next month.
China shares rose with the blue chip CSI300 index up 0.6%.
"The spotlight will be on Washington, D.C. this week," said Stephen Innes, Chief Global Markets Strategist at Axi.
The Biden administration tried to head off Republican concerns that their $1.9 trillion pandemic relief proposal was too expensive with lawmakers from both parties saying they had agreed that getting the COVID-19 vaccine to Americans should be a priority.
Financial markets have been eyeing a massive U.S. economic stimulus but disagreements have meant months of indecision in a country suffering more than 175,000 COVID-19 cases a day with millions out of work.
"Vaccine breakthroughs make it likely that life will become more functional again at some point in 2021, resulting in higher gross domestic product growth and more robust corporate earnings," Innes said.
"But increasing global COVID19 infections, new variants of the virus, tightening social distancing restrictions and delays in vaccine rollouts in some places, all increase the near-term growth risks."
World COVID-19 cases are inching toward 100 million with more than 2 million dead.
However, "there was one negative COVID-19 news story after another Friday and which equity market participants ultimately couldn't ignore," said Ray Attrill, head of forex strategy at National Australia Bank.
Hong Kong locked down an area of the Kowloon peninsula Saturday - the first such measure the city has taken since the pandemic began while some countries, including Mexico, recorded their highest daily case numbers.
Reports the new UK COVID variant wasn't only highly infectious but perhaps more deadly than the original strain also added to worries.
In the European Union, political leaders were dismayed over a holdup by AstraZeneca and Pfizer in delivering promised doses with Italy's prime minister lashing out at the suppliers and saying delays amounted to a breach of contractual obligations.
Pfizer, last week, said it was temporarily slowing supplies to Europe to make manufacturing changes that would boost output. On Friday, AstraZeneca said initial deliveries to the region would fall short because of a production glitch.
Market participants did see some hope in the U.S. after politicians agreed Sunday that the most important priority should be producing and efficiently distributing a vaccine.
The Democrats and Republicans are discussing a new $1.9 trillion in U.S. coronavirus relief.
Financial markets have been considering the U.S. economic stimulus but disagreements have meant months of indecision in a country suffering more than 175,000 COVID-19 cases a day with millions out of work.
On Friday, the Dow fell 0.57%, the S&P 500 lost 0.30% and the Nasdaq composite added 0.09%. The three main U.S. indexes closed higher for the week, with the Nasdaq up more than 4%.
Jefferies analysts said U.S. stock markets looked overvalued though they still remained bullish. "For the stock market to have a real nasty unwind, rather than just a bull market correction, there needs to be a catalyst," analyst Christopher Wood said.
"That means either an economic downturn or a material tightening in Fed policy," Wood said, adding neither was likely to occur in a hurry.
In currencies, pairs were little moved as markets awaited a U.S. Federal Reserve meeting Wednesday.
The dollar index was flat at 90.21, with the euro at $1.2169, while sterling was last trading at $1.3683.
The yen was unchanged at 103.77 per dollar.
Poor risk sentiment saw Treasury yields move lower Friday ahead of some record-sized bond auctions and Federal Reserve meeting.
In commodities, oil prices fell with Brent down 7 cents at $55.34 a barrel and U.S. crude off 5 cents at $52.22.
Gold was higher with spot prices up 0.2% at 1,855.9 an ounce.
