Yahoo Finance Asia-Pacific Stock Indexes Chase Wall Street’s Gains; Japan’s Nikkei Hits Two-Month High
The major Asia-Pacific stock indexes extended gains on Tuesday, following the lead of Wall Street, as more countries emerged from their economic lockdowns and a successful early-stage trial of a coronavirus vaccine drove sentiment.
Data from Moderna Inc.’s COVID-19 vaccine, the first to be tested in the United States, showed it produced protective antibodies in a small group of healthy volunteers. This news boosted sentiment as investors wagered on a faster-than-expected economic recovery.
On Tuesday, Japan’s Nikkei 225 Index settled at 20433.45, up 299.72 or +1.49%. Hong Kong’s Hang Seng Index finished at 24388.13, up 453.36, up 1.89% and South Korea’s KOSPI Index closed at 1980.61, up 43.50 or +2.25%.
In China, the Shanghai Index settled at 2898.54, up 23.16 or +0.81%. Australia’s S&P/ASX 200 Index finished at 5559.50, up 99.00 or +1.81%.
Analysts Still See Headwinds and Risks
Despite the robust investor sentiment, analysts expect a steep contraction in world growth with the outlook for 2021 still uncertain with no approved treatments or vaccines for COVID-19 currently. Healthcare experts predict a safe and effective vaccine could take 12 to 18 months.
“I hope…we find the vaccine in record time and everything is rosy again but the underlying reality is still very shaky,” Hugh Young, managing director for the Asia Pacific region at Aberdeen Standard Investments, told CNBC’s “Street Signs” on Tuesday.
Commenting on the market rally following that positive development from Moderna, Young said: “It might well have legs short-term but I think the reality that we’re going to see over coming weeks is the effect on corporate earnings and corporate health. The second quarter this year is going to be pretty terrible for economies worldwide…and for most corporates.”
Analysts at Perpetual wrote in a note, “It may be the case that central bank liquidity is chloroforming markets to overlook risks such as overleveraged corporate and government balance sheets, growing COVID-19 case numbers, growth holes and a slow recovery path.”
Japanese Stocks Hit 2-1/2 Month High
Japanese stocks advanced in line with their Wall Street and Asian peers and hit a two-and-a-half month high on Tuesday on hopes for a swift reopening of the global economy. Highly cyclical iron and steel, sea transport and insurance were the top three performing sectors on the main bourse.
China’s Xi Pledges $2 Billion to Help Fight Coronavirus
Chinese President Xi Jinping said Monday his country will provide $2 billion over two years to help other countries respond to the impact of the coronavirus pandemic.
“China will provide 2 billion U.S. dollars over two years to help with COVID-19 response, and with economic and social development in affected countries, especially developing countries,” Xi said, according to an official English translation.
This article was originally posted on FX Empire
