HONG KONG – Asian markets mostly rose again today, but investor sentiment remains divided between optimism over vaccine developments and concern about surging virus cases around the world.
A lack of movement in stimulus talks on Capitol Hill, and a spat between the White House and Federal Reserve over cash for emergency lending facilities are also tempering the mood.
Hopes that the world can begin to return to some form of normal in the new year have been rising this month after top pharma giants announced better-than-expected results from trials of their Covid-19 vaccines.
On Friday, Pfizer and its German partner BioNTech said they have applied for emergency use authorisation for their drug, which could be rolled out next month.
Moderna is expected to make its own application soon.
And yesterday, a top government health official said he is hopeful that jabs could be given within weeks.
“Our plan is to be able to ship vaccines to the immunisation sites within 24 hours of approval” by the US Food and Drug Administration (FDA), Moncef Slaoui, head of the US government’s coronavirus vaccine effort, told CNN, pointing to December 11 and 12 as possible dates.
FDA vaccine advisers will meet on December 10 to discuss approval.
“There is a lot of enthusiasm over the vaccine news, and rightly so – as soon as we can get something that is very effective distributed widely, the sooner we can get back to ordinary life,” Brian Jacobsen of Wells Fargo Asset Management told Bloomberg TV.
“The problem, from our perspective, is we first have to get through winter, and this is setting us up for some downside economic surprises.”
Seoul led gains, rallying more than 1%, while Shanghai, Sydney, Singapore, Wellington, Taipei, Manila and Jakarta also posted healthy gains.
However, Hong Kong slipped as investors fret over a resurgence of the virus in the city that many fear could see economically painful containment measures reintroduced.
Cathay Pacific tumbled more than 4% as a planned Hong Kong-Singapore travel bubble was called off. Singapore Airlines, meanwhile, fell 1%.
While vaccines are on their way, investors are keeping tabs on Washington, where lawmakers remain at loggerheads on a new, badly needed stimulus, with analysts saying nothing will likely be agreed before Christmas.
Adding to the unease is concern about a spat between the White House and Fed after Treasury Secretary Stephen Mnuchin on Thursday refused to extend a series of programmes supporting the corporate credit market, municipal lending, and small and medium businesses.
He said the cash, which has not been used by the central bank, should be targeted at other pandemic-relief efforts.
But, the Fed hit out at the move, and observers questioned its timing.
“An emerging risk for investors is an untimely withdrawal of support for the US’ real economy, just as social mobility restrictions undermine activity for the second time this year,” said Axi’s Stephen Innes.
“Economic data will likely get worse before it gets better, (and) the impact of continued lockdowns will be felt for some time before vaccines become widely available.”
In currency trading, the pound extended gains on hopes that Britain and the European Union could soon announce a post-Brexit trade deal.
European Commission president Ursula von der Leyen on Friday said there has been better progress in recent talks, with an 11-month deadline on December 31 for the two sides to reach a deal.
Key figures around 0230 GMT
Hong Kong – Hang Seng: down 0.1% at 26,416.30
Shanghai – Composite: up 0.5% at 3,392.79
Tokyo – Nikkei 225: Closed for a holiday
Euro/dollar: up at US$1.1874 from US$1.1857 at 2200 GMT
Pound/dollar: up at US$1.3322 from US$1.3289
Dollar/yen: down at ¥103.76 from ¥103.83
Euro/pound: down at 89.13 pence from 89.26 pence
West Texas Intermediate: down 0.1% at US$42.40 per barrel
Brent North Sea crude: up 0.1% at US$45.02 per barrel
New York – Dow: down 0.8% at 29,263.48 (close)
London – FTSE 100: up 0.3% at 6,351.15 (close). – AFP, November 23, 2020
