Asia Markets wrap

Hong Kong: Asian markets rallied on Monday as further hopes of an early mass-produced vaccine rose calming worries stemming from the spike in coronavirus infections in Europe and the United States.

China and Japan unveiled upbeat economic data that stoked optimism about the last quarter in the world’s second and third largest economies.

Industrial output in China surged 6.9% in October from a year earlier, expanding for the seventh straight month while forecast-beating expansion in the third quarter helped Japan’s economy exit recession.    

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Japan’s Nikkei 225 index jumped 2.05% to be the regional outperformer, Australia’s S&P ASX 200 climbed 1.23%, Hong Kong’s Hang Seng index advanced 0.86% and China’s CSI300 added 0.97%. Regionally, the MSCI Asia Pacific index vaulted 1.78%.

“At a time when Covid-19 cases are resurging, particularly in Europe and the US, financial markets actually have recently been boosted by news of positive interim Phase III results from Pfizer/BioNTech’s potential Covid-19 vaccine with an apparent 90%-plus protection,” said Andre de Silva, HSBC’s Head of Global EM Rates Research.“The news also bodes well for other experimental vaccines.” 

Interim analysis of data from Moderna’s Phase III trials shows that the treatment is 95% effective, the company said later on Monday. Goldman Sachs analysts say the probability that enough doses of FDA-approved vaccine to inoculate 25 million people are distributed in the US by 1Q21 has spiked up to 83% from its recent trough at 48%.

“There is little doubt that there will be more than one vaccine readily available by the middle of next year. The bottleneck is rather producing the vaccine on a mass scale,” said Jefferies analyst Chris Wood. He said under his base assumption, by the time such a vaccine is readily available, the virus will have burnt itself out in line with Farr’s Law.

Farr’s Law states that epidemic events rise and fall in a roughly symmetrical pattern. The time-evolution behaviour could be captured by a single mathematical formula that could be approximated by a bell-shaped curve.

Signs of cooling US-China tensions also helped with TikTok owner ByteDance given a two- week extension to reach a deal to sell US assets.

In a risk-on environment, China announced a launch of a multi-tranche euro-denominated bond offering. It hired banks for a possible offering of 5-,10- and 15-year bonds which could be launched mid-week.

China usually issues global bonds for benchmarking purposes. It issued dollar-denominated bonds in November last year in a $6 billion raising.

Also on Asia Times Financial

Asia Stocks

  • Japan’s Nikkei 225 index jumped 2.05%
  • Australia’s S&P ASX 200 climbed 1.23% 
  • Hong Kong’s Hang Seng index advanced 0.86%
  • China’s CSI300 added 0.97%
  • The MSCI Asia Pacific index vaulted 1.78%.

Stock of the day

Consumption plays Anta Sports and Li Ning surged after positive economic data from China where consumption spending is surging, gave investors the confidence that sales would remain elevated. The stocks rose by as much as 8% and 4.4% respectively.

This report appeared initially on Asia Times Financial.

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