Asian stocks on path to finish turbulent 2020 at record highs

Shares in Asia-Pacific were trading higher on the final day of this year as vaccine rollout elevated hopes for next year’s economic recovery. However, the market’s optimism also pushed the dollar lower.

While some markets of the region are already closed for holidays, like bourses in South Korea and Japan, most of the stock markets that were open on Thursday edged higher. 

Most of the gains were seen in China, the only major economy set to expand this year, with its benchmark Shanghai Shenzhen CSI 300 Index adding nearly two percent to reach its historic peak. Other major indices in China were also up on Thursday after official data showed that activity in the country’s services and manufacturing sector expanded again this month, although at a slower pace than in November. 

Meanwhile MSCI Asia Pacific Index – the gauge of Asian Pacific shares outside Japan – rose 0.1 percent to its latest peak, according to Reuters.

Trading in Australia went against the trend, with All Ordinaries index losing more than one percent. The drop came as the government introduced harsher restrictions amid a rising number of coronavirus infections in some parts of the country. 

The rally in the region could have also been driven by the developments on a China-EU trade deal, which is meant to expand access to each other’s markets. After a year of talks, the two sides reached an agreement “in principle” on Wednesday.

While stock markets mostly bottomed out after the coronavirus pandemic caused a panic sell-off in March and have even hit new highs since then, the US dollar is finishing the year lower. The dollar index was 0.1 percent down on Thursday, while for the whole year it lost around eight percent against a basket of major currencies.

US stock futures were little changed before the last trading session of 2020, with investors waiting for data on initial jobless claims.

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