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Nikkei back (briefly) over 30K, oil rises on Middle East tensions
Asian shares advanced to record highs on Monday as successful coronavirus vaccine rollouts globally raise hopes of a rapid economic recovery amid new fiscal aid from Washington, while oil prices rose on heightened tensions in the Middle East. Japan’s Nikkei share average rose above the 30,000 level for the first time in more than 30 years on Monday, as it regained the ground lost during decades of economic stagnation. It's all-time high of 38,957, touched at the end of 1989. The Nikkei’s epic downfall since then even dwarfed the Wall Street’s worst bear market after the Great Depression. The Dow Jones Industrial Average took 25 years to recover to its previous peak.
Equities also got a boost after data showed Japan’s gross domestic product grew faster than expected in the fourth quarter. Japan’s economy expanded by an annualised 12.7% in October-December last year, government data showed on Monday, a sign the country was emerging from the initial hit from the coronavirus pandemic. The preliminary reading for fourth-quarter gross domestic product (GDP) exceeded economists’ median estimate of a 9.5% gain. On a quarter-on-quarter basis, the economy grew 3.0% in the final three months of 2020, the Cabinet Office data showed.
Oil prices climbed to the highest since January 2020 on hopes U.S. stimulus will boost the economy and fuel demand. Bitcoin was barely changed in early Asian trading at $47,994, below a record high of $49,714.66. Oil prices were also buoyant after a Saudi-led coalition fighting in Yemen said it intercepted an explosive-laden drone fired by the Iran-aligned Houthi group, raising fears of fresh Middle East tensions.
None of the Japanese banks that topped the list of companies with biggest market capitalisation in 1990 exist now, as they subsequently suffered massive loan losses and repeated mergers to survive. The last time the Nikkei traded above 30,000 was Aug. 3, 1990, a day after Iraq’s surprise invasion of Kuwait poured cold water on investors expecting the peace will prevail after the end of Cold War in late 1989. Compared to the 1988-1990 period, most investors see the Nikkei’s rise above 30,000 as less frothy. The market is traded at about 17 times expected earnings, higher than recent years but not about 50 times in 1990.
https://www.reuters.com/article/us-global-markets/asian-shares-hit-all-time-highs-oil-rises-on-middle-east-tensions-idUSKBN2AF01B
https://www.macrotrends.net/2566/crude-oil-prices-today-live-chart
https://www.marketwatch.com/investing/index/nik?countrycode=JP
https://www.bloomberg.com/markets/stocks/futures
https://www.kitco.com/charts/livesilver.html