Asian share markets mostly rose yesterday as global investors applauded successful trial data for a coronavirus vaccine, although expected delays to any mass roll-out took the gloss off early gains.
The positive tone in Asian equities came after Pfizer said its Covid-19 vaccine, developed with German partner BioNTech, was more than 90 per cent effective in preventing infection, marking the first successful results from a large-scale clinical trial.
Major Asian markets soared on the vaccine news before weakening later in the session.
Singapore's Straits Times Index gained 3.67 per cent to take it to its highest point since June.
Japan's Nikkei 225 ended up nearly 0.3 per cent after touching a 29-year high in earlier trading.
Australia's S&P/ASX 200 closed 0.66 per cent higher while Hong Kong's Hang Seng Index rose 1.1 per cent.
Despite the optimistic tone, there was some weakness in China, with the CSI300 Index slipping 0.17 per cent. Analysts attributed the decline to the heavy exposure of China's indexes to tech stocks, which came under pressure as investors eyed less consumer reliance on technology if a vaccine leads to an easing of movement restrictions.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.1 per cent higher.
"The market is looking forward to a more sustained solution to the pandemic and that is why we have seen such a sharp reaction," said Mr Tai Hui, chief Asia market strategist at JPMorgan Asset Management.
But he sounded caution over the speed in which the vaccine could be implemented, "given more tests are needed, then the approval process". "Manufacturing and distribution would mean the vaccine, if truly effective, is still months away from mass deployment," he said.
The equities optimism was not shared across all asset classes. Oil prices slipped in Asian trade after posting the biggest one-day percentage gain in five months.
Airline, travel and tourism stocks across Asia were beneficiaries of the positive sentiment from the vaccine announcement and held their gains while the broader indexes weakened in the afternoon.
"No surprises but it's essentially a rotation... What was bought in the last eight months is now being sold and what was sold is being bought," said Citigroup global markets director Elizabeth Tian.
Qantas Airways closed 8.3 per cent higher to hit its highest level since March, Japan Airlines shot 20.6 per cent higher and ANA Holdings rose 17.5 per cent.
In Hong Kong, Cathay Pacific Airways shares jumped 13 per cent, the best since July.
Singapore Airlines jumped 14 per cent.
"Markets will get ahead of themselves in the short term with the vaccine news, but longer term it feels like it is going higher," Ord Minnett adviser John Milroy said from Sydney.
On Wall Street, futures on the Nasdaq 100 slumped 1.5 per cent, while contracts on the Russell 2000 rose almost 2 per cent.
The vaccine news also sent long-dated US Treasury yields hitting their biggest one-day jump since March. The yield curve, an indication of risk appetite, hit its steepest level since that month.
REUTERS
