Asia stocks mixed after US shares hit record on Covid vaccine news

Asia-Pacific equities were mixed in Tuesday trading following a rally on Wall Street, where US stocks hit records on positive Covid-19 trial news from biotech group Moderna.

Hong Kong’s Hang Seng index and South Korea’s Kospi both rose 0.1 per cent, while Australia’s S&P/ASX 200 added 0.3 per cent as trading resumed after an outage on Monday. Japan’s Topix fell 0.1 per cent.

In China, where the coronavirus pandemic has been largely contained, the CSI 300 index of Shanghai and Shenzhen-listed stocks fell 0.3 per cent. But transportation-related shares climbed on the prospect of renewed international travel, led by a 3 per cent gain for state-run carrier Air China.

In the US on Monday, the S&P 500 index gained 1.2 per cent to set a record close, while the tech-focused Nasdaq Composite advanced 0.8 per cent.

The announcement that Moderna’s vaccine was more than 94 per cent effective at inoculating patients against Covid-19 in a late-stage trial followed similar news last week from Pfizer and BioNTech, which also drove markets higher.

Investors have rotated into sectors affected by the pandemic in response to the optimistic vaccine announcements, though strategists have warned that the rollout of any shot remains far in the future.

“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 at JPMorgan Asset Management.

The subdued sentiment in Asian equities fed through to US stock futures, which tipped the S&P 500 to shed 0.3 per cent when trading resumes on Wall Street on Tuesday. The FTSE 100 was expected to dip by 0.4 per cent.

In commodities markets, oil prices continued to rise on the prospect of a global economic recovery.

Brent crude, the international benchmark, rose 0.6 per cent to $44.10 a barrel in Asia trading after jumping 2.8 per cent on Monday. West Texas Intermediate, the US marker, added 0.5 per cent to $41.55.

“Developments with regards to a vaccine are constructive for oil demand in the medium to long term,” said Warren Patterson, head of commodities strategy at ING. “However, for the near term it changes little, with still plenty of concern over the demand impact from the latest wave of Covid-19.”

The dollar steadied in Asian trading, with the dollar index measuring the greenback against a basket of international peers unchanged after dropping 0.3 per cent on Monday.

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