Asian stocks inch higher
Hong Kong/New York — Asian stocks cautiously pushed further into record territory on Tuesday, and oil edged higher after US benchmarks were pepped up by news of another promising coronavirus vaccine.
Investor sentiment was given a boost when Moderna said its experimental Covid-19 vaccine was 94.5% effective in preventing infection based on interim data.
The Cambridge, Massachusetts-based firm became the second drugmaker, after Pfizer, to announce promising trial data in the development of a vaccine to defeat the pandemic. Its shares gained 9.6% on the day.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.11% on Tuesday morning, a day after hitting its highest level since launching in 1987.
The MSCI World Index of global shares which also hit a record high on Monday, ticked higher still in Asia’s morning trading.
“Investors are looking further ahead in the pandemic development into 2021, instead of focusing on the challenging outbreak that’s taking place in the US and Europe now,” said Tai Hui, chief Asia market strategist, JPMorgan Asset Management.
Hong Kong benchmark rose 0.1% and Australia’s S&P/ASX 200 rose 0.23%, after Monday’s trading had been severely curtailed by a software glitch
Japan’s Nikkei 225 fell 0.2% after hitting a 29-year high the day before.
All three main Wall Street indexes advanced on Monday, led by cyclical and small cap names, with the Dow Jones Industrial Average setting a record as it neared the 30,000 mark for the first time in nine months.
“This is a continuation of what we saw last week as the vaccine being a catalyst for a rotation into cyclical sectors such as energy, financials, and defence with expectations for renewed demand and travel,” said Thomas Hayes, managing member at Great Hill Capital in New York.
The same sentiment helped oil prices hold onto Monday’s gains.
US crude on Tuesday morning was at $41.36 a barrel, little changed after rising 3.02% on Monday. Brent rose 0.3% after an earlier rise of 2.43%.
In currency markets, China’s central bank on Tuesday lifted its official yuan midpoint to the highest in nearly 29 months, underpinned by solid gains in spot prices a day earlier on the back of strong economic data.
The positive news helped the risk friendly Australian dollar, which rose to a one-week high against the dollar, but rising case numbers in the US meant the dollar was broadly flat against the safe haven yen.
US Treasury yields rose on Monday and the yield curve steepened in the wake of the vaccine developments. The yield on benchmark 10-year notes was last at 0.9012%, from 0.893% late on Friday.
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