By Jessica DiNapoli
NEW YORK, June 25 (Reuters) - Asian stocks were set to gain
on Friday, as global sentiment remained doggedly upbeat despite
increased volatility and rising new coronavirus infections, with
Wall Street pushed higher by a loosening in bank regulations.
Throwing some cold water on the rally, however, were the
U.S. Federal Reserve's capital limits for banks after its stress
tests on the sector revealed key vulnerabilities.
"Futures are pointing to gains, it's just a question of how
they interpret the latest directive from the U.S. Federal
Reserve," said Tom Piotrowski, a markets analyst at Australian
broker CommSec. "We could see a flow-on effect of regulators
stepping in and making sure banks maintain financial health now
that we see the pandemic take on different qualities, with the
challenges drawn out over a long period of time."
The Fed on Thursday said it will cap big bank dividend
payments and halt share repurchases until at least the fourth
quarter. It found lenders faced significant capital losses when
tested against an economic downturn caused by the coronavirus
pandemic. Australian S&P/ASX 200 futures YAPcm1 rose 1.21% in early
trading. Japan's Nikkei 225 futures NKc1 added 0.13%.
Hong Kong's Hang Seng index futures .HSI HSIc1 lost
0.93%. Hong Kong was closed for a public holiday on Thursday and
markets in mainland China continue their break on Friday.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.45%.
Coronavirus cases across the United States have soared in
recent days, with Texas pausing its re-opening as COVID-19
infections and hospitalizations surged in the state.
On Wall Street, the Dow Jones Industrial Average .DJI rose
1.18%, the S&P 500 .SPX gained 1.10% and the Nasdaq Composite
.IXIC added 1.09%.
The gains were due in part to earlier announcements from
U.S. regulators loosening rules to allow banks to make larger
investments in riskier vehicles such as venture capital funds.
"Investors continue to grapple with mostly negative U.S.
virus news, which continue to suggest there is an increasing
risk reopening plans in the U.S. economy could be reversed," the
National Australia Bank wrote in a research note. "But as we
have seen before, news of more supportive measures have yet
again propped up the equity market."
The U.S. dollar strengthened on Thursday due to fears of
rising coronavirus cases. The dollar index =USD rose 0.123%.
Oil prices rose about 2% in a volatile session, boosted by
signs of a small rise in fuel demand but offset by rising
coronavirus cases.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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