Asian markets mostly rise on vaccine, stimulus hopes
July 16 2020 12:01 AM
Employees work at the Tokyo Stock Exchange. Japanese shares jumped 1.6% to 22,945.50 points yesterday.

AFP/Hong Kong

Fresh hopes for a coronavirus vaccine and another round of US stimulus lifted most Asian markets yesterday, although gains were tempered by the reimposition of lockdown measures and China-US tensions weighed on Hong Kong and Shanghai.
Investors took their lead from Wall Street’s pop higher, which came after US biotech firm Moderna said the final stage of human trials for a Covid-19 vaccine would start at the end of the month, after a report said first stage tests had been a success.
The news follows an announcement from Pfizer and BioNTech that two of four candidates for treatment had received “Fast Track” designation from US officials. OANDA’s Jeffrey Halley said “significantly... the results have been published in a peer-reviewed journal, meaning independent eyes have been cast over the results, and like what they see”.
Providing added support was optimism the US would add to its stimulus after reports said top Republicans were reconsidering their opposition to it, including on extending supplemental unemployment benefits.
The trillions of dollars pledged by the US and other governments and central banks around the world have been a key driver of the rally in stock markets from their March lows.
And analysts expect that cash will probably fuel further gains, with Stephen Innes at AxiCorp saying even weak corporate earnings would be unlikely to derail that.
“A market that has ignored virus resurgence concerns and US-China tensions... is suddenly supposed to start worrying about earnings. That never made a great deal of sense to me.
“Sure, there may well be some profit-taking due to the run the market has been on, but we then go back to the wall of money argument time and time again.
Booking profits are all very well and good, but the way this market seems to be heading, it is not clear you will be able to repurchase those stocks so readily again.”
Tokyo jumped 1.6% to 22,945.50, while Sydney, Mumbai, Singapore and Wellington rose more than 1%, while Seoul, Jakarta and Bangkok also posted gains.
But Shanghai ended 1.6% lower at 3,361.30.
Hong Kong was flat, with optimism over a vaccine offset by China-US worries and rising infection numbers in the city.
Relations between the superpowers – already hit by a series of issues including trade and Huawei – were strained further by Donald Trump’s decision to remove Hong Kong’s special trade status, and his signing into law of an act authorising sanctions on banks over China’s clampdown in the city.
Beijing responded to the Hong Kong Autonomy Act by saying it would “make necessary responses to protect its legitimate interests, and impose sanctions on relevant US personnel and entities”.
“In the longer term, this adds another needless layer of uncertainty to already frosty Sino-US relationships, especially with regards to trade,” said Justin Tang, head of Asian research at United First Partners.
“Against the backdrop of Covid-19-related disruptions, an escalation of trade wars will plunge supply chains into further disarray.” Meanwhile, infections continue to spike around the world, forcing countries that had been emerging from lockdowns to enforce new measures to contain the pandemic and jolting the economic recovery.
Officials in Hong Kong, which had gone weeks without a new infection, fear the city is about to be hit by a third wave, while Florida, which was one of the first states to lift restrictions, saw a new daily record of deaths Tuesday.

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