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Hong Kong (CNN Business)Global stocks were mixed on Wednesday after the Dow closed above 30,000 points for the first time, hitting pause on a market rally that has been fueled by encouraging vaccine news and signs that a formal transition of power is underway in Washington.
US stock futures were little changed ahead of the open. Dow (INDU) futures dipped by around 0.1%. S&P (SPX) futures were marginally weaker and Nasdaq (COMP) futures were up 0.3%.
In Europe, Germany’s DAX (DAX)and the FTSE 100 (UKX) in London posted small losses, while France’s CAC 40 (CAC40) was flat. In Asia, Hong Kong’s Hang Seng Index (HSI) closed 0.1% higher, South Korea’s Kospi (KOSPI) rose 0.2% and China’s Shanghai Composite (SHCOMP) gave up 1.2%.
Japan’s Nikkei (N225) led the region’s gains, rising around 2% at one point to its highest level since early 1991. The index closed 0.5% higher. Shares in the country’s flagship carrier ANA jumped nearly 5%, after Japan and China announced on Tuesday that they had agreed to resume business travel by end of month.
Promising coronavirus vaccine developments are helping to support global stocks, according to Stephen Innes, chief global market strategist at Axi.
“Global investors are elated by the vaccine news,” Innes wrote in a note on Wednesday. The optimism has helped elevate oil futures, with the price of Brent Crude, the global benchmark, rising above $48 a barrel as traders look to a pick up in demand in 2021 on the basis that a vaccine will allow economies to ease coronavirus restrictions more rapidly.
Investors are also relieved to see that a formal transition from US President Donald Trump to President-elect Joe Biden is finally underway, Innes said.
The US General Services Administration is starting the so-called ascertainment process, which allows Trump administration officials to coordinate with the Biden team. Sources confirmed to CNN that former Federal Reserve chair Janet Yellen will be Biden’s nominee for Treasury Secretary, and she’s expected to push for more stimulus on taking office — another positive for stocks.
Still, investors are balancing this against the ongoing pandemic. The United States and Europe are grappling with a second wave of coronavirus infections, which have prompted restrictions on daily life in some areas that could remain in place for several months and do further damage to the recovery. Elsewhere, Hong Kong’s chief executive Carrie Lam has said that the city is on the brink of another outbreak, while cases are climbing in Brazil and Mexico.
Investors will be looking for clues on the US economic recovery on Wednesday, with initial jobless claims expected and readings on consumer confidence, personal income and new home sales.
