Asian stocks near two-year high as virus treatment hopes lift mood

25-Aug-2020 Intellasia | Reuters | 8:41 AM Print This Post

Asia’s stock markets opened higher on Tuesday following a Wall Street rally driven by vaccine hopes, while the dollar found some support ahead of a key central bank speech.

Also supporting the mood were statements from both China and the United States saying top-level trade representatives had held constructive talks over the future of the Phase 1 trade deal.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent to its highest since early January and sits just a fraction below a two-year high.

Japan’s Nikkei opened 1 percent higher and banking stocks led Australia’s S&P/ASX 200 up 0.8%. Futures pointed to a steady open in Hong Kong and China. S&P 500 futures rose 0.3 percent in Asia.

Markets worldwide were boosted when US regulators on Sunday authorised the use of blood plasma from recovered COVID-19 patients as a treatment option, helping the S&P 500 1 percent higher to another record close overnight. [.N]

The US Food and Drug Administration’s move was hailed by President Donald Trump. Shares of AstraZeneca also rose on a Financial Times report that the US government was considering fast-tracking its experimental vaccine.

That seemed to overshadow a rise in coronavirus cases in Europe and the first documented case of human re-infection with COVID-19, where a man in Hong Kong caught the virus again some four months after first being infected.

Later on Monday top US infections diseases expert Anthony Fauci also told Reuters that rushing out vaccines could undermine trials of other promising candidates.

In currency markets, the dollar, which has been sensitive to sentiment in equity markets edged higher, defying pressure from a gain in stocks that often leads investors to sell dollars for riskier currencies.

Investors now await a Thursday speech from Federal Reserve chair Jerome Powell and expect he might address the Fed’s future approach to inflation and allow it to run hotter than 2 percent to make up for years of undershooting.

The dollar also found support from an overnight rise in yields, which extended by a whisker on Tuesday as the yield on benchmark US government 10-year debt edged up to 0.6590%. That kept the euro to $1.1795 and the Aussie at $0.7171 in Asian morning trade.

In commodity markets oil clung to overnight gains after storms disrupted US production. Brent crude futures were steady at $45.13 a barrel and US crude dipped 0.3 percent to $42.50 a barrel.

The firmer dollar held gold to $1,929 an ounce. A light data calendar in Asia has investors looking to Australian payrolls figures ahead of German’s IFO business survey due at 0800 and US consumer confidence data at 1400 GMT.


Category: FinanceAsia

Print This Post

Comments are closed.