Asian markets rose Monday, recovering some of the losses at the end of last week, as investors followed a strong performance on Wall Street fuelled by hopes for a coronavirus vaccine, though a spike in infections around the world capped gains.
Trillions of dollars in government support is keeping equities well supported but confidence is being strangled by the spread of the disease, with an explosion of cases forcing some countries to reimpose containment measures just weeks after easing lockdowns.
Tokyo led the gains, adding more than two percent, while Shanghai, Seoul and Taipei were all more than one percent higher.
Hong Kong added 0.8 percent and Sydney climbed one percent, with Mumbai 0.3 percent higher. Wellington, Jakarta also rose but Singapore and Manila fell.
London, Paris and Frankfurt all rose more than one percent at the open.
The advances came after the Dow and S&P 500 surged more than one percent in New York and the tech-heavy Nasdaq chalked up another record.
“Ongoing grim US COVID-19 infection news continues to be summarily ignored in favour of ongoing optimism regarding the timeline for the discovery and rapid roll-out of an effective vaccine… and/or more policy support for asset prices in the US economy,” said Ray Attrill at National Australia Bank.
– ‘Coronavirus storm’ -Still, the pandemic’s rapid spread around the planet remains a concern.
The government of Spain’s Catalonia region on Sunday told residents in and around the northeastern town of Lerida to go back into home confinement, while South African President Cyril Ramaphosa warned his country faced a “coronavirus storm” that was “far fiercer and more destructive than any we have known before”.
In the US, Florida recorded 15,299 new cases in a single day, the highest one-day total of any state to date — and more than all the cases yet registered in South Korea.
And Hong Kong, which had gone weeks with no locally spread cases, is seeing a worrying spike in infections that have led to the imposition of containment measures.
But analysts said they were confident the global economy, which is expected to fall into recession this year, and markets will continue to recover.
“We do think that the global economy is now entering a multi-year recovery but there are going to be wobbles along the way,” Mary Nicola, at PineBridge Investments, told Bloomberg TV.
And AxiCorp’s Stephen Innes added that equities would likely soar once a vaccine was eventually found.
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“Once the vaccine is made readily available, all systems go, and the incomprehensibly large global stimulus will find its way into every liquid asset imaginable,” he said in a note.
– Key figures around 0720 GMT -Tokyo – Nikkei 225: UP 2.2 percent at 22,784.74 (close)
Hong Kong – Hang Seng: UP 0.8 percent at 25,923.73
Shanghai – Composite: UP 1.8 percent at 3,443.29 (close)
London – FTSE 100: UP 1.3 percent at 6,173.77
West Texas Intermediate: DOWN 0.9 percent at $40.20 per barrel
Brent North Sea crude: DOWN 0.8 percent at $42.89 per barrel
Euro/dollar: UP at $1.1332 from $1.1296 at 2150 GMT on Friday
Dollar/yen: UP at 106.92 yen from 106.91 yen
Pound/dollar: UP at $1.2662 from $1.2620
Euro/pound: DOWN at 89.48 pence from 89.50 pence
New York – Dow: UP 1.4 percent at 26,075.30 (close)
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