Asia report: Stocks mostly higher on Covid vaccine hopes
Stocks in Asia finished mostly higher on Wednesday, with the exception of China, as investors cheered positive news from Moderna Therapeutics around its potential vaccine for Covid-19.
In Japan, the Nikkei 225 was up 1.59% at 22,945.50, as the yen strengthened 0.32% against the dollar to last trade at JPY 106.90.
Of the major components on the benchmark index, automation specialist Fanuc was up 4.18%, fashion firm Fast Retailing added 0.62%, and technology conglomerate SoftBank Group advanced 0.84%.
The broader Topix index added 1.56% to settle at 1,589.51 by the end of trading in Tokyo.
Sentiment was given a boost by the Bank of Japan during the session, which said the country’s economy was “likely to improve gradually” from the second half of 2020, although it said it would be “only moderate” in terms of pace.
“For the time being, the Bank will closely monitor the impact of Covid-19 and will not hesitate to take additional easing measures if necessary, and also it expects short- and long-term policy interest rates to remain at their present or lower levels.”
On the mainland, the Shanghai Composite was down 1.56% at 3,361.30, and the smaller, technology-heavy Shenzhen Composite was 2.07% weaker at 2,261.80.
The negative sentiment in China came after US president Donald Trump signed legislation overnight, imposing sanctions on the People’s Republic, in response to the country’s recent national security law in Hong Kong.
Trump also signed an executive order ending the special administrative region’s special trading status with the US, also as a result of the widely-condemned law, which has been seen as undermining Hong Kong’s autonomy from Beijing.
Investors were also left digesting the news that Huawei equipment was being banned from all new 5G installations in the UK, with any existing kit being given a deadline of 2027 to be decommissioned.
South Korea’s Kospi managed gains of 0.84% to 2,201.88, while the Hang Seng Index in Hong Kong eked out 0.01% to finish the day at 25,481.58.
The blue-chip technology stocks were both higher in Seoul, with Samsung Electronics up 1.67% and SK Hynix advancing 0.12%.
On the coronavirus front, investors globally cheered news from Moderna Therapeutics over its potential Covid-19 vaccine, after the company said it produced a “robust” immune response in all 45 patients in an early-stage human trial.
“A late surge in US trading on the back of positive trial results from Moderna’s coronavirus vaccine has outweighed investor concerns about further rises in coronavirus cases in the US, as well as in Asia, against a backdrop of rising geopolitical tension between the US and China,” said CMC Markets chief market analyst Michael Hewson.
“Investors also appeared to be unconcerned that the vaccine prompted some side effects in these early stage trials, however Asia markets were slightly more mixed with the Bank of Japan leaving rates unchanged.
"The Nikkei 225 and Korean markets pushed higher, however Chinese and Hong Kong markets slid back in the wake of President Trump signing the legislation revoking Hong Kong’s special trade status.”
Oil prices were higher as the region went to bed, with Brent crude last up 1.14% at $43.39 per barrel, and West Texas Intermediate adding 1.27% to $40.80.
In Australia, the S&P/ASX 200 was up 1.88% at 6,052.90, while across the Tasman Sea, New Zealand’s S&P/NZX 50 added 1.01% to 11,610.52.
Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.34% at AUD 1.4285, and the Kiwi advancing 0.31% to NZD 1.5263.