· Asia shares rally on vaccine hopes, oil retreats after early gains
Asian shares extended gains on Tuesday as more countries emerged from their economic lockdowns and a successful early-stage trial of a coronavirus vaccine cheered sentiment, although oil shed some of its early moves higher.
The rally followed a firmer Wall Street lead after 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.
The positive early test results boosted sentiment as investors wagered on a faster-than-expected economic recovery.
Many economies could post strong activity data from May as a result of easing restrictions, but the initial burst may give market participants a false sense of a return to normal, CBA said in a research note.
· MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.8% to two-week highs, after U.S. stocks ended the previous session with gains. The index is, however, down 1.9% so far this month.
Australia’s benchmark index and Hong Kong’s Hang Sang were the lead gainers, up 2% each, South Korea added 2.3% while China’s blue-chip index climbed 0.8%.
Japan’s Nikkei added nearly 2% to the highest since early March.
However, analysts, for now, expect a steep contraction in world growth with the outlook for 2021 still uncertain with no approved treatments or vaccines for COVID-19 currently. Experts predict a safe and effective vaccine could take 12 to 18 months.
· Hong Kong’s Hang Seng index jumped 2.06%, as of their final hour of trade, with shares of HSBC soaring about 3.5%. Mainland Chinese stocks edged higher on the day, with the Shanghai composite up 0.81% to about 2,898.58 while the Shenzhen component gained 1.21% to 11,052.85.
In corporate news, shares of Thai Airways skyrocketed nearly 12% after the country’s cabinet approved a plan for the airline to go to bankruptcy court for debt restructuring, Reuters reported Tuesday citing the Thai prime minister.
· European markets turn negative as investors monitor coronavirus vaccine progress, economic data
European stocks whipsawed on Tuesday morning, halting the positive trend set at the start of the week as hopes rise for a coronavirus vaccine.
The pan-European Stoxx 600 reversed earlier progress to slide 0.4% below the flatline, with construction stocks falling 1.4% to lead losses while the travel and leisure sector held onto 0.6% gains.
On the data front, new EU car registrations fell 76.3% in April, from the same month a year ago, according to data published Tuesday from the European Automobile Manufacturers Association (ACEA).
Germany’s closely-watched ZEW survey of economic sentiment for May is also due.
Reference: CNBC, Reuters
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