Equities
mostly rose in Asia yesterday, with support coming from a Wall Street
rally fuelled by merger activity and hopes for a coronavirus vaccine.
After their first two successive weekly losses since March, markets were
enjoying a broadly positive start to this one as traders eyed progress
in drug trials, with AstraZeneca saying tests on the candidate it is
developing with Oxford University could be finished by the end of the
year.
And the head of Pfizer said the drug it is working on with BioNTech could be ready for distribution within months.
“Financial markets remain optimistic a vaccine will get done before the year is over,” said OANDA’s Edward Moya.
However,
the World Health Organisation’s European chief Hans Kluge sounded a
sober note about the fight against the disease. “I hear the whole time:
‘the vaccine is going to be the end of the pandemic’. Of course not,” he
warned, saying the end of the pandemic would come when communities
learn to live with the disease.
Kluge also told AFP on Monday that the autumn will be “tougher” with “more mortality”. Hong Kong and Shanghai rose.
Traders
cheered data showing China’s retail sales — a key gauge of the crucial
domestic consumer sector — rose for the first time since the pandemic
struck, beating expectations.
There was also a forecast-beating pick-up in industrial output.
The readings indicate the world’s number-two economy is gradually recovering from the impact of virus lockdowns.
Seoul, Mumbai, Singapore, Taipei, Manila and Bangkok also rose, though Tokyo, Sydney and Jakarta edged down.
London, Paris and Frankfurt all rose in opening trade. But analysts warned that further ups and downs were to be expected
“Market
volatility is returning after months of steady advances in risk
assets,” BlackRock Investment Institute strategists said.
“Valuations have risen, and we could see greater volatility as a result, especially as the US election closes in.”
On
currency markets, the pound remained under pressure as Britain and the
European Union sparred over Prime Minister Boris Johnson’s legislation
that would break the Brexit deal signed earlier this year, with regard
to several key areas related to Northern Ireland.
MPs passed the bill
at its first reading Monday night but Johnson faces a rebellion within
his own Conservative party, fuelling uncertainty in Britain’s already
beleaguered economy.
“Tensions within the UK Conservative party over
the PM’s internal market bill continue to fester,” said Stephen Innes at
AxiCorp. “There will likely be no clarity on Brexit well into November
or even December, suggested by the latest sharp deterioration in the
tone of negotiations.”
Innes added that expectations London and
Brussels will eventually broker some sort of trade agreement — citing
brinkmanship on the British side — is keeping sterling supported.
However,
he said: “What is the timeline now? Brexit negotiations have not been
formally suspended though it is hard to see much of anything getting
when the chief negotiators are engaged in foul-tempered Twitter
exchange.”
In Tokyo, the Nikkei 225 closed down 0.4% to 23,454.89
points; Hong Kong — Hang Seng ended up 0.4% to 24,742.05 points and
Shanghai — Composite closed up 0.5% to 3,295.68 points yesterday.
A screen displays stock figures outside the Hong Kong Stock Exchange. The Hang Seng closed up 0.4% to 24,742.05 points yesterday.