Markets extend rally as optimism abounds on vaccine, US politics


HONG KONG (AFP): Asian markets rallied Wednesday (Nov 25) following a blockbuster performance on Wall Street as vaccine successes and easing US political uncertainty boosted investor confidence in the economic recovery.

Signs that infection rates in Europe are slowing enough to allow some countries to ease lockdown measures added to the sense of hope across trading floors.

However, still-high death numbers and a pick-up in new cases in several Asian nations tempered the excitement.

Hopes for a worldwide rollout of an inoculation were given an extra lift Tuesday when Russia said its Sputnik V drug had shown to be 95 per cent effective, making it the fourth that could be available soon after similar positive announcements from Pfizer/BioNTech, Moderna and AstraZeneca.

"While the logistical challenges will still be immense, the geographic diversity of the possible suppliers is promising," said Gorilla Trades strategist Ken Berman.

"The fact that several European outbreaks seemed to have peaked was another bullish catalyst... as even though the US wave is lagging behind the European one by several weeks, the end of the current domestic outbreaks could be closer than previously thought."

The medical breakthroughs come as political uncertainty appears to be waning in Washington after government officials began the crucial transition process paving the way for Joe Biden to enter the White House.

While he still denies losing the Nov 3 election, Donald Trump's decision to sign off on the move by the General Services Administration (GSA) was effectively an admission of defeat.

Investors are also upbeat about Biden's cabinet picks so far, particularly former Federal Reserve boss Janet Yellen's nomination as treasury secretary, with optimism she can work well with current central bank head Jerome Powell.

"A Yellen-Powell policy combination in government and the central bank is as dovish and positive as one can imagine for risk assets," said Axi's Stephen Innes.

"Even if Congress balks at further significant fiscal stimulus... investors will position for high-profile policymaker pressure starting to bear fruit."

Wall Street's three main indexes ended more than one per cent higher Tuesday, with the Dow closing above 30,000 for the first time and the S&P 500 also notching up a record.

The rally seeped through to Asia, which was already enjoying a broadly healthy week.

Tokyo, Hong Kong and Jakarta were all more than one per cent higher, while Shanghai, Sydney, Singapore, Seoul, Taipei and Wellington were also well up.

The gains were led by energy firms and tourism-linked companies such as airlines as traders bet on a boost to business as the world slowly returns to some sense of normality.

Expectations of a rise in demand supported oil prices, which have jumped around a quarter over the past month and are now sitting at levels not seen since March, before they crashed into negative territory.

High-yielding currencies such as the South Korean won, South African rand, Russian ruble and Australian dollar were all up against the dollar, thanks to improving confidence in riskier assets.

"Looking three to six months out, we do think the recovery will maintain its momentum," Anna Han, at Wells Fargo Securities, told Bloomberg TV.

"When you see that reflation trade coming back, it's telling you that investors are gaining confidence in growth prospects looking forward."

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3

Asian , equities , market , Nov 25 , opening

   

Did you find this article insightful?

Yes
No

Next In Aseanplus News

Asian markets a sea of red as virus woes add to correction fears
All schools in Thailand, except Samut Sakhon, to reopen from Feb 1
S. Korea's Moon hopes country can be a top 10 economy in 2021
Singapore teen held for planning mosque attacks to receive religious, psychological counselling
Misinformation and fear dog Philippine plan for Covid-19 vaccine drive
China's Xi stresses Hong Kong leaders must be patriotic
China firmly opposes Indian move to continue apps ban
Asean News Headlines as at 6pm on Wednesday (Jan 27)
Covid-19: Record 18,000 daily virus toll worldwide; more than 100 million cases recorded; global death toll at 2.16 million
Man jailed for 1,050 years for raping stepdaughter

Stories You'll Enjoy


-->