Asia stocks mixed as global rally cools on profit-taking, lingering Covid-19 worries

Pedestrians walk past a display showing closing information of the Nikkei Stock Average in Tokyo, Japan, 24 November 2020. PHOTO: EPA-EFE

HONG KONG (AFP) - Asian markets were mixed on Wednesday (Nov 25) as an earlier rally fizzled out on profit-taking and lingering worries about the impact of a spike in coronavirus infections around the world.

Regional investors rushed out of the blocks in the morning 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, excitement was tempered by a still-high number of new cases and deaths, as well as a pick-up in several Asian nations that are causing governments to reimpose containment measures.

Hopes for a worldwide rollout of a vaccine were given an extra lift pn 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.

The 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 November 3 election, Donald Trump's decision to sign off on the move by the General Services Administration was effectively an admission of defeat.

Investors were 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.

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 initially seeped through to Asia, but traders lost momentum as the day wore on.

Tokyo, Hong Kong, Sydney, Wellington and Thailand rose but Shanghai, Singapore, Seoul, Taipei, Manila and Mumbai were all in the red.

Japan's Nikkei 225 index closed up 0.50 per cent, after rallying earlier by 1.7 per cent.

Hong Kong's Hang Seng index pared gains to 0.2 per cent while the Shanghai Composite Index was down 1.2 per cent.

Singapore's Straits Times Index was down 0.9 per cent, reversing an early gain of the same margin, at 4.10pm local time.

Australia's S&P/ASX 200 closed up 0.6 per cent while South Korea's Kospi index ended 0.6 per cent lower.

lya Spivak, head Asia Pacific strategist at DailyFX, said attention was now on the release later in the day of minutes from the Federal Reserve's most recent policy meeting earlier this month, describing it as "a big event risk".

"Markets don't seem keen on follow-through. The worry is that the Fed will continue to signal that they're keeping to a hands-off posture. No tightening, but no new easing either."

Some high-yielding currencies that had surged in the morning also gave up their gains, though expectations of a rise in demand continued to support oil prices, which have jumped around a quarter over the past month and are now sitting at levels not seen since March.

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