Asian stocks extend gains as vaccine hopes support global reopening

By Lawrence Delevingne BOSTON (Reuters) - Asian shares rose on Wednesday as hopes for a successful coronavirus vaccine lifted expectations of a swift reopening of the global economy, which would help the region's heavily trade-dependent markets.

Reuters November 11, 2020 07:05:43 IST
Asian stocks extend gains as vaccine hopes support global reopening

Asian stocks extend gains as vaccine hopes support global reopening

By Lawrence Delevingne

BOSTON (Reuters) - Asian shares rose on Wednesday as hopes for a successful coronavirus vaccine lifted expectations of a swift reopening of the global economy, which would help the region's heavily trade-dependent markets.

Australia's benchmark S&P/ASX 200 <.AXJO> climbed 1.05% with energy stocks and miners boosted by higher crude and commodity prices.

New Zealand's benchmark S&P/NZX 50 index <.NZ50> rose around 0.6% in early trade ahead of the country's central bank meeting.

Japan's Nikkei 225 <.N225> added 1.1%, and Hong Kong's Hang Seng index futures <.HIS> rose 0.09%.

"Investors anticipate a lift in economic activity and a swing back to physical businesses, judging by their support for travel, consumer, financial, materials and energy stocks," Michael McCarthy, chief market strategist for CMC Markets in Sydney, wrote in a note Wednesday.

The gains in Asia came despite the S&P 500 index slipping slightly and the Nasdaq closing sharply lower on Tuesday as vaccine optimism led investors away from market leaders and toward cyclical stocks associated with economic recovery.

At the same time, there were mixed signals from U.S. government leaders about near-term policies.

President Donald Trump and other top Republican lawmakers continued their refusal to concede the election to President-elect Joe Biden, delaying the transition of power and related policy shifts.

U.S. Federal Reserve policymakers also said on Tuesday that a surge in coronavirus cases threatens to slow economic growth once more and that more targeted government aid was needed.

That shouldn't stop government stimulus efforts, according to ANZ Research strategists Liz Kendall and David Croy.

"Policy makers remain vigilant and monetary policy will err towards being very accommodative until a vaccine can be comprehensively rolled out," they wrote on Wednesday.

E-mini futures for the S&P 500 were flat.

European shares held near eight-month highs on Tuesday, riding a wave of optimism about a COVID-19 vaccine breakthrough, although concerns about the pandemic's economic damage capped gains.

Oil also ended nearly 3% higher on Tuesday as hopes of a COVID-19 vaccine outweighed worries about a drop in fuel demand from new lockdowns to contain the virus.

U.S. crude rose 1.11% to $41.82 per barrel and Brent was at $44.05, up 3.89% on the day.

"The reflation trade continues to work in earnest and the rotation to the unloved areas of the market continues," Chris Weston, Pepperstone’s Melbourne-based head of research, wrote in a note Wednesday.

The greenback was steady on Tuesday and the yen stayed near three-weeks lows, as investors remained optimistic about progress toward a vaccine and the currency markets digested Monday's big moves.

The euro rose 0.03% to $1.1818, the Japanese yen strengthened 0.04% versus the greenback at 105.26 per dollar, while sterling last traded at $1.3263, down 0.06% on the day. The Australian dollar fell 0.01% versus the greenback at $0.728.

U.S. Treasury yields rose modestly on Tuesday, as the market consolidated the previous session's strong gains fueled by news of a potential coronavirus vaccine.

Gold regained some ground lost in Monday's plunge as expectations of fiscal and monetary stimulus offered support to the safe-haven metal.

Spot gold added 0.1% to $1,878.06 an ounce.

(Reporting by Lawrence Delevingne in Boston; Editing by Sam Holmes)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.