Forex Analysis & Reviews: 29.12.2020 - US stocks soared while Asia...

29.12.2020 12:57 PM

US stocks soared while Asia went multidirection days before the celebration of New Year

US stock exchanges recorded an increase in its major stock indexes on Monday evening. According to the results of trading, all three indices managed to reach their maximum historical values, which was a surprise for most experts.

The main wave of support swept the market after US President Donald Trump still decided to put his resolution on the country's budget for the year 2021 which totals $2.3 trillion. In addition to all other expenses, it includes the package of financial assistance against the background of the coronavirus pandemic amounting to $900 billion, as decided last Sunday. However, the problems around this event do not end until now. On the one hand, market participants were able to breathe a sigh of relief, since at least some final result has already appeared. On the other hand, the decision was very ambiguous, since Trump signed the document on the conditions that the government would raise the amount of relief payments to the civilian population of the state. On Monday, the House of Representatives still accepted the conditions put forward by Trump and agreed to raise aid from $600 to $2,000. Meanwhile, until this issue is settled in the Senate, a final decision on it is not necessary to wait. And it is there that serious obstacles to its ratification may arise. In this regard, investors do not yet seek to actively express emotions, but their mood has already improved significantly.

By now, with a certain degree of confidence, we can say that the confusion around the incentive program and other bills, which was closely monitored by market participants, has almost come to an end. Of course, there are still some questions, but their solution is now more related to technical issues. All this, of course, can become the basis for the growth of such a sector as risky assets.

In the future, the markets are not expected to be too fast and dynamic, as investors traditionally behave rather restrained ahead of the New Year holidays. Already this Friday, the trading floors of the United States of America will be closed for the celebration of the New Year.

Some analysts warn that after the holidays, markets may face a new unpleasant surprise – an increase in coronavirus infection. This may cause a negative trend in the markets in the first month of 2021.

However, do not forget that an active vaccination campaign has begun in the US, which can contain an excessive increase in the incidence of diseases.

At the end of Monday's trading, the Dow Jones Industrial Average was 0.68% higher or 204.1 points, which allowed it to move to a new level of 30,403.97 points.

The S&P 500 index jumped 0.87% or 32.3 points. Its current value began to consolidate around 3,735.36 points.

The NASADAQ Composite index gained 0.74% or 94.69 points, which sent it to 12,899. 42 points.

Meanwhile, a rather ambiguous and multidirectional dynamics was noted in the major stocks indexes in the Asia-Pacific region on Tuesday morning. At the same time, the trades themselves are held with a low degree of activity, as investors prefer to pay more attention to the preparation of the New Year celebration.

Japan's Nikkei 225 index was up 2.25%, allowing it to rise to its all-time high of 27,458.35 points. Recall that the indicator could not cross the mark of 27,000 points for almost thirty years.

China's Shanghai Composite index, on the other hand, declined by 0.4%. The Hong Kong Hang Seng index did not support the negative trend and rose 1%.

South Korea's KOSPI index fell 0.3%. The level of the consumer confidence index in the country also showed a negative trend and reduced 89.8 points, while previously it was 97.9 points. It should be noted that now it has taken its minimum value for the last three months.

Australia's S&P/ASX 200 rose 0.5%, which was the third increase in a row.

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*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.