Asia stocks edge higher after vaccine hopes push Wall Street to record highs

Japan's Nikkei 225 fell 0.2 per cent after hitting a 29 year high the day before. PHOTO: EPA-EFE

HONG KONG (REUTERS) - Asian stocks pushed cautiously further into record territory on Tuesday (Nov 17) after US benchmarks rose to all-time highs on news of another promising coronavirus vaccine.

Investor sentiment was given a boost when Moderna said its experimental Covid-19 vaccine was 94.5 per cent effective in preventing infection based on interim late-state data.

The firm became the second drugmaker, after Pfizer, to announce promising trial data in the development of a vaccine to defeat the pandemic. Its shares gained 9.6 per cent on the day.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.1 per cent on Tuesday morning, a day after hitting its highest level since launching in 1987.

The MSCI World Index of global shares which also hit a record high on Monday, ticked higher still in Asia's morning trading.

"Investors are looking further ahead in the pandemic development into 2021, instead of focusing on the very challenging outbreak that's taking place in the US and Europe now," said Tai Hui, chief Asia market strategist, JP Morgan Asset Management, in emailed comments.

Hong Kong benchmark rose 0.1 per cent and Australia's S&P/ASX 200 rose 0.2 per cent, after Monday's trading had been severely curtailed by a software glitch

Japan's Nikkei 225 fell 0.2 per cent after hitting a 29 year high the day before.

Singapore's Straits Times Index was up 1 per cent at 10.41am local time.

All three main Wall Street indexes advanced on Monday, led by cyclical and small cap names, with the Dow Jones Industrials Average setting a record as it neared the 30,000 mark for the first time in nine months.

"This is a continuation of what we saw last week as the vaccine being a catalyst for a rotation into cyclical sectors such as energy, financials, and defense with expectations for renewed demand and travel," said Thomas Hayes, managing member at Great Hill Capital in New York.

The same sentiment helped oil prices hold onto Monday's gains.

US crude on Tuesday morning was at US$41.36 per barrel little changed after rising 3.02 per cent on Monday and Brent rose 0.3 per cent after an earlier rise of 2.43 per cent.

In currency markets, China's central bank on Tuesday lifted its official yuan midpoint to the highest in nearly 29 months, underpinned by solid gains in spot prices a day earlier on the back of strong economic data.

The positive news helped the risk friendly Australian dollar , which rose to a one week high against the dollar, but rising case numbers in the United States meant the dollar was broadly flat against the safe haven yen.

US Treasury yields rose on Monday and the yield curve steepened in the wake of the vaccine developments. The yield on Benchmark 10-year notes was last at 0.9012 per cent, from 0.893 per cent late on Friday.

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