Asian actions supported by hopes of coronavirus vaccination

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SYDNEY (Reuters) – Asian stocks firmed on Monday on renewed hope for a coronavirus vaccine after AstraZeneca resumed its Phase 3 trial, although sentiment is still cautious ahead of a big week of community meetings. central banks in the United Kingdom, Japan and the United States.

FILE PHOTO: A man using his cell phone is silhouetted against a stock quote board outside a brokerage firm in Tokyo on February 21, 2006. REUTERS / Toru Hanai

In a sign that the positive mood will spread elsewhere, the pan-regional Euro Stoxx 50 futures STXEc1 and German DAX futures FDXc1 rose 0.5% in early trades while FTSE London futures FFIc1 added 0.24%.

US equity futures, the S&P 500 e-minis SC1, jumped 1.3% after a mixed session on Wall Street last week.

Most of Asia’s major markets were in the green with the largest MSCI Asia-Pacific equity index outside of Japan .MIAPJ0000PUS increase of 0.9% for its second consecutive session of gains.

Australian stocks .AXJO climbed 0.6% while Japan’s Nikkei .N225 added 0.7%. Chinese stocks got off to a strong start but slashed some of the early gains thanks to the blue chip index .CSI300 last up 0.1%.

Friday marked six months since the World Health Organization (WHO) declared the coronavirus a pandemic on March 11.

Since then, the world’s major economies have entered recession and millions of people have lost their jobs, prompting central banks around the world to launch unprecedented stimulus measures.

Bazooka politics supported financial markets, with the S & P500 .SPX up 22%, 10-year Treasury yields plunge 20.4 basis points and the greenback = USD sliding 3.3%. By far the best performing major currency is the Australian dollar AUD = D3, up 11.9%, thanks to a good appetite for risk.

“A wild race indeed and one which is likely to continue as the results of the Phase 3 vaccine begin to flow over the next few weeks,” NAB analyst Tapas Strickland said in a note Monday.

AstraZeneca AZN.L said over the weekend it had resumed UK clinical trials of its COVID-19 vaccine, one of the most advanced in development, after getting the green light from watchdogs.

Late-stage trials of the experimental vaccine, developed with researchers at the University of Oxford, were suspended last week after illness in a study subject in Britain, casting doubts over early deployment .

A vaccine is long overdue to help lift the world out of a coronavirus-induced lockdown.

“The reopening of the global economy prompts us to recommend a long trade of a basket of 14 lagging back-to-work stocks for a basket of 14 top-flight COVID-19 winners,” BCA Research wrote in a report. note.

“While we maintain a cyclical and secular bullish outlook on the broader market, a near-term correction due to technical and (geo) political reasons is likely,” he said.

“A playable short-term withdrawal is required.”

Later this week, the US Federal Reserve will hold its two-day policy meeting in which it is expected to hold rates while also explaining the previously announced change to inflation targeting.

In addition, “the Fed should be less proactive than in the past in tightening its policy,” NAB’s Strickland noted.

The Bank of Japan and the Bank of England will announce their respective policy decisions on Thursday.

The focus will also be on the election of the new Japanese prime minister with the results of a vote in the party hall expected around 06:30 GMT.

The major currencies were treading water on Monday.

The dollar was a bit weaker against the yen at 106.06 JPY = although still far from its low this year of 101.2.

The euro EUR = was flat at $ 1.1850. The Australian AUD = D3 was slightly lower at $ 0.7283 while the pound was a little higher at $ 1.2823.

In raw materials, American crude CLc1 jumped 0.6% to $ 37.55 a barrel. Brent raw LCOc1 climbed 0.4% to $ 40 a barrel.

Gold was firm, with spot prices XAU = at $ 1,946.9 per ounce.

Reporting by Swati Pandey; Editing by Sam Holmes

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