Asian markets look to continue upward run on vaccine hopes

Economy
© Reuters. A man wearing protective face mask walks in front of a stock quotation board outside a brokerage in Tokyo © Reuters. A man wearing protective face mask walks in front of a stock quotation board outside a brokerage in Tokyo

By Pete Schroeder

(Reuters) – Asian shares look set to continue a march upwards as optimism over a coronavirus vaccine carry weight over the ongoing spread of the disease and simmering U.S.-China tensions.

Australian S&P/ASX 200 futures rose 0.37% in early trading. {{178|Japan’s Ni added 0.07%, and Hong Kong’s futures rose 0.25%.

E-mini futures for the S&P 500 rose 0.19%.

MSCI’s gauge of stocks across the globe closed up 1.16%.

A run of promising news in efforts to develop a COVID-19 vaccine ran through U.S. markets. An experimental vaccine produced by biotech startup Moderna (NASDAQ:) Inc showed it was safe and provoked immune responses in volunteers, an early- stage trial showed on Tuesday. There were also reports of pending positive news on vaccine work from the University of Oxford.

“U.S. equities continued to defy all gravity as investor optimism revels amid the progress in developing a vaccine which continues to reign supreme,” wrote Stephen Innes, chief global markets strategist at AxiCorp, in an analyst note.

In the United States, stocks closed sharply higher on the vaccine news, buttressed by a strong quarterly report from Goldman Sachs (NYSE:).

A new report from the Federal Reserve also found U.S. businesses saw an uptick in activity as states relaxed restrictions, although uncertainty about the outlook remained with coronavirus cases spreading.

The rose 0.85%, while the S&P 500 gained 0.91% and the grew 0.59%.

Oil prices rose thanks to a drop in inventories, but gains were limited by plans from OPEC and its allies to ease supply curbs. settled up 89 cents, or 2.1%, at $ 43.79 a barrel.

Investors appeared willing to take on more risk in currency markets, pushing the safe-haven U.S. dollar to a one-month low. The fell 0.105%, dropping below 96 for the first time since June.

The risk appetite was also evident as U.S. Treasury yields rose and the yield curve steepened, indicating a wider spread between long- and short-term interest rates.

Investors will be watching for new economic data out of China, which will release figures on second-quarter GDP data on Thursday, along with June factory output, retail sales and fixed-asset investment. A Reuters poll found analysts expect China to report 2.5% economic growth, reversing a 6.8% first-quarter decline driven by the pandemic.

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