SINGAPORE (REUTERS) - Asian stocks rose to a fresh seven-week high on Thursday (April 30), lifted by encouraging early results from a Covid-19 treatment trial, though bonds and currencies held cautious ranges ahead of a European Central Bank meeting later in the day.
Anthony Fauci, the top US infectious disease official, said Gilead's antiviral remdesivir will become the standard of care for Covid-19 after early results from a trial seemed to show it helped speed recovery.
The news rallied Wall Street on Wednesday and lifted MSCI's broadest index of Asia-Pacific shares, excluding Japan, by 0.8 per cent to its highest since mid-March.
Japan's Nikkei, returning from a holiday on Wednesday, jumped 2.5 per cent to a seven-week high as well, catching up on the week's gains. More caution was evident in other asset classes, with the US dollar firm and US futures steady.
Singapore's Straits Times Index jumped 2.1 per cent as of 11:25am local time.
Australia's ASX 200 rose 1.4 per cent. The Shanghai Composite rose 1 per cent. Markets in Hong Kong and South Korea were closed for public holidays.
"Any positive medical development is helpful," said Westpac FX analyst Sean Callow.
"But no-one should be counting on a major breakthrough - the key for markets is control of the spread of the virus," he said, another front where there are positive signs.
"I think it is reasonable for markets to be less bearish than they were in mid-March...but it's far too early for a sustained rally in risk appetite, so we're probably due for a little bit of a pullback."
Futures for Wall Street's S&P 500 handed back early gains to turn flat and the dollar held its own against the risk-sensitive Antipodean currencies - rising for the first time in a week against the Aussie and kiwi.
The yield on benchmark US 10-year Treasuries stayed parked at 0.6237 per cent, after the US Federal Reserve left interest rates near zero and gave no indication of lifting them any time soon.
OF MONEY AND MEDICINE
Markets have been excited by the prospect of a Covid-19 treatment because it may help countries emerge from lockdowns - even though investors' hopes don't seem to take into account regulatory and distribution difficulties should a treatment be found.
Another focus has been the enormous fiscal and monetary policy efforts from world governments and central banks to staunch the economic damage from the pandemic.
That has the ECB under increasing pressure to deliver even more support on Thursday - probably by expanding its bond buying programme - as European leaders seem unable to agree on the details of a rescue package.
"The tone has been set for the ECB to 'do whatever it takes' via its bond purchase programmes in terms of size, composition and maturity," strategists at Singapore's DBS Bank said in a note.
A press conference following the ECB meeting is due at 1330 GMT.
The euro was stuck at US$1.08640 on Thursday, near the top of a range where it has been pegged for two weeks, but drifted lower as the dollar broadly firmed.
The greenback scraped off multi-week lows against the Antipodean currencies and last sat at US$0.6537 per Aussie and US$0.6122 per kiwi.
Elsewhere there was encouraging news from South Korea, which on Thursday reported no new domestic coronavirus cases for the first time since its Feb 29 peak.
However, comments from US President Donald Trump accusing China of seeking to defeat his re-election bid in November gave cause for renewed caution.
Gold was steady at US$1,711.31 per ounce.
Brent crude and US crude futures each rose more than 6 per cent amid optimism that a storage squeeze is not as bad as first feared, and that demand for fuel may soon return.