By Gina Lee
Investing.com – Asia Pacific stocks were mostly up on Wednesday morning, boosted by hopes for an effective COVID-19 vaccine and the passage of the latest U.S. stimulus measures.
Japan’s Nikkei 225 was up 0.29% by 10:39 PM ET (2:39 AM GMT). South Korea’s KOSPI gained 0.41% even as the country saw a record 1,078 new daily COVID-19 cases on Wednesday.
In Australia, the ASX 200 jumped 1.23%.
Hong Kong’s Hang Seng Index rose 0.82%. Government officials are reportedly leaning towards extending social-distancing measures currently in place, including the closure of gyms and beauty salons, until Jan. 1. The city's Legislative Council is expected to vote on a HK$5 billion ($644.99 million) to HK$6 billion relief package for impacted businesses on Monday.
China’s Shanghai Composite edged up 0.12% while the Shenzhen Component was down 0.21%. Chinese leaders are set to convene for the annual Central Economic Work Conference during the week, where they will hash out the country's economic priorities for 2021.
“We expect many emerging market economies to continue to show positive momentum in 2021 led by Asia,” TD Securities said in a note.
The note added that, on aggregate, they would recover lost output from 2020 and that “China is likely to see a more rapid convergence to pre-COVID GDP levels.”
Meanwhiles, in the U.S., hopes are rising that Democrats and Republicans will pass a bill based on a $748 billion bipartisan proposal. If passed, the package would inject cash directly into the economy, with previous benefits beginning to expire at the end of the month.
Across the Atlantic, U.K. and European Union (EU) negotiators are also racing against the clock to reach a post-Brexit trade deal. After a weekend of intense talks, chief EU Brexit negotiator Michel Barnier said on Tuesday that he sees a “narrow path” towards a deal, if both sides resolve their differences.
With the number of global COVID-19 cases continuing to rise incessantly and prompting some countries to tighten restrictive measures, some investors were optimistic about the market’s long-term prospects.
“Tighter lockdowns will impact short-term economic activity, but Brexit talks and the U.S. aid package discussions remain alive, providing a degree of longer-term optimism,” ANZ Research strategists wrote in a note.
On the vaccines front, Moderna Inc's (NASDAQ:MRNA) COVID-19 vaccine mRNA-1273 looks set to receive regulatory authorization within the week. The U.S. also expanded its roll-out program for BNT162b2, the vaccine codeveloped by Pfizer Inc (NYSE:PFE) and BioNTech SE (F:22UAy).
The U.S. Federal Reserve is widely expected to provide fresh guidance on its continued asset purchases as it concludes its two-day policy meeting later in the day. The Bank of England and the Mexican, Swiss and Indonesian central banks will hand down their policy decisions on Thursday, with the Bank of Japan and the Bank of Russia’s decisions due on Friday.
Other investors also remained optimistic.
“There is significant chance, especially if [the] bond market becomes temporarily unruly, that the Fed will adopt yield curve control (YCC) pegging three-year maturities to about 0.3% in 2021,” Nikko Asset Management chief global strategist John Vail said in a note.
“The European Central Bank is also shifting to a YCC regime, with flexible QE purchases conducted to informally maintain the yield curve to its liking, hopefully avoiding a forced massive injection of new funds,” the note added.