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Asian Stocks Up as Investors Digest Vaccine Approval and U.S. Stimulus Optimism

Stock MarketsDec 02, 2020 10:12PM ET
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By Gina Lee – Asia Pacific stocks were mostly up on Thursday morning, despite a muted start as investors took stock of the market optimism surrounding the approval of a COVID-19 vaccine and the possibility of U.S. stimulus measures.

China’s Shanghai Composite fell 0.48% by 10:58 PM ET (2:58 AM GMT) and the Shenzhen Component was down 0.33%. Data released earlier in the day showed that the Caixin services Purchasing Managers' Index (PMI) for November came in at 57.8, beating both the 56.5 reading in forecasts prepared by and October’s 56.8 figure.

However, U.S.-China tensions were up as the U.S. House of Representatives approved legislation that could see Chinese companies, such as Alibaba (NYSE:BABA) Group Holding, getting kicked off U.S. exchanges should they not allow regulators to review their financial audits.

Hong Kong’s Hang Seng Index was up 0.29%.

Japan’s Nikkei 225 edged up 0.15%. The country’s services PMI came in at 47.8 in November, slightly above October’s figure of 47.7.

South Korea’s KOSPI gained 0.34%, with high school students across the country taking the college scholastic ability test, or suneung, during the day. In Australia, the ASX 200 rose 0.42%.

Investors cheered as the U.K.’s Medicines and Healthcare products Regulatory Agency gave its approval to BNT162b2, the COVID-19 vaccine candidate jointly developed by BioNTech SE (F:22UAy) and Pfizer Inc (NYSE:PFE). Inoculations of the most as risk groups could start as early as the following week.

The U.S.’s FDA will hold an advisory committee meeting in the following week. New York Governor Andrew Cuomo has said New York’s first delivery, enough for 170,000 residents, is expected on Dec. 15.

Meanwhile, Moderna Inc (NASDAQ:MRNA) also awaiting clearance for its candidate mRNA-1273 in the U.S. and Europe.

Global shares saw a record month in November, but investors are now focusing on bonds. Treasury yields saw one the year’s biggest spikes on Tuesday, leading to speculation over rising rates’ potential impact on shares and corporate debt.

However, some investors remained optimistic.

“The market has almost immediately priced in a better-than-expected 2021, particularly in the second half and that’s what we are seeing here, and on the yield curve as well … the message here really is that better days are ahead and that dips and consolidations are eminently buyable,” BNY Mellon (NYSE:BK) Investment Management chief strategist Alicia Levine told Bloomberg.

Meanwhile, House of Representatives Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer called for immediate talks over the latest stimulus measures and urged that a bipartisan $908 billion aid proposal form the foundation for talks with Republicans. Congress has until Dec. 11 to reach a consensus on the measures should it wish to avoid a government shutdown.

Federal Reserve Chair Jerome Powell also said on Wednesday that there were no hard feelings between the Fed and Treasury Secretary Steven Mnuchin over the latter’s sunsetting of emergency lending programs in November. Powell’s comments came during a second day of testimony before the Senate Banking Committee.

The Fed and the European Central Bank will both convene for their respective policy meetings, the last for 2020, in the following week.

Some investors remained cautiously optimistic.

“Markets are quite likely to muddle through from here. The vaccine is increasingly priced in. A couple of months ago, no one knew how deep coronavirus would be, or what the outcome of the election was. Now both sources of uncertainty have been removed,” Frazis Capital Partners portfolio manager Michael Frazis told Reuters.

November’s U.S. employment record, including manufacturing and non-farm payrolls data , is due out on Friday.

Asian Stocks Up as Investors Digest Vaccine Approval and U.S. Stimulus Optimism

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