Asian stocks follow Wall Street higher on vaccine hopes

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Published: July 2, 2020 2:18 PM

Asian stock markets followed Wall Street higher Thursday as hopes for development of a coronavirus vaccine competed with concern about rising US infections.

Asian stock markets, Wall Street, coronavirus vaccine, Pfizer, BioNtech, Nikkei, v shaped recovery, S&P-ASX 200, nasdaq, Covid-19 impactInvestors were encouraged after Pfizer and BioNtech announced preliminary data from a vaccine test, one of a series being carried out by global developers. (AP photo)

Asian stock markets followed Wall Street higher Thursday as hopes for development of a coronavirus vaccine competed with concern about rising US infections. Benchmarks in Shanghai, Tokyo, Hong Kong and Australia all advanced.

Investors were encouraged after Pfizer and BioNtech announced preliminary data from a vaccine test, one of a series being carried out by global developers. At the same time, the populous American states of California and Texas reported daily record highs in new cases.

”Vaccine hopes, while welcome, fall short of guaranteeing a V-shaped recovery,” said Mizuho Bank in a report. The Shanghai Composite Index rose 1.6 per cent to 3,073.98 and the Nikkei 225 in Tokyo added 0.2 per cent to 22,159.722. The Hang Seng in Hong Kong, reopening after a holiday, gained 1.6 per cent to 24,801.28.

In South Korea, the Kospi advanced 0.8 per cent to 2,124.39 while Australia’s S&P-ASX 200 added 1.6 per cent to 6,030.30. India’s Sensex opened up 0.9 per cent while New Zealand, Singapore and Jakarta also rose.

On Wall Street, the benchmark S&P 500 index rose 0.5 per cent on Wednesday to 3,115.86, boosted by gains for technology companies. The Dow Jones Industrial Average lost 0.3 per cent to 25,734.97. The Nasdaq composite, which is heavily weighted with technology companies, climbed 1 per cent to a record 10,154.63.

Stock markets around the world roared back last quarter on hopes economies are pulling out of their deepest slump since the 1930s. Analysts warn, however, that prices might be rising too far and too fast to be supported by economic activity when infections are rising in the United States, Brazil and some other countries.

In the United States, a report on manufacturing showed activity returned to growth in June, a much better reading than the contraction economists expected. Earlier, a separate report suggested private employers hired more workers than they cut in June.

”It is still a guessing game as to how the Covid-19 lingering impact will sustain,” said Jingyi Pan of IG in a report.

In China, two surveys this week showed manufacturing improved in June, adding to signs of a gradual recovery. A similar survey for the 19-country eurozone showed manufacturing almost growing again after widespread shutdowns.

Analysts said that while the data pointed in the right direction, it shows that an economic recovery from the pandemic will be slow. In energy markets, benchmark US crude gained 1 cent to USD 39.83 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 55 cents to settle at USD 39.82 on Wednesday.

Brent crude, the international price standard, gained 4 cents to USD 42.07 per barrel in London. The contract rose 76 cents the previous session to USD 42.03 a barrel. The dollar declined to 107.44 from Wednesday’s 107.49 yen. The euro rose to USD 1.1264 from USD 1.1244.

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