Asian markets, risky assets rise on vaccine hopes By Reuters

By Swati Pandey

SYDNEY (Reuters) – Asian stocks rose on Wednesday as optimism about a coronavirus vaccine bolstered appetite for risk, while the euro rose to a four-month high on the prospect of stimulus ahead of a crucial summit in the EU.

MSCI’s broader index of Asia Pacific stocks outside Japan () increased 1.2%, approaching a recent high of five months.

Japan’s Nikkei () added 1.5% to the highest since June 10, while Australia’s benchmark index rose 1%. Chinese stocks rose modestly with the CSI300 First Order Index () up 0.3%.

E-mini futures for the S&P 500 it was up 0.8%.

Risk appetite was fueled by Modern Experimental vaccine Inc (O 🙂 for COVID-19 that was shown to be safe and elicited immune responses in all 45 healthy volunteers in an ongoing early-stage study.

On Tuesday, the Dow Jones Industrial Average () rose more than 2%, while the S&P 500 () gained 1.34% and the Nasdaq Composite () rose 0.94%. ()

“… the vaccine is more than just an exhibition cap. It is the last cap of the recession,” said Stephen Innes, market strategist at AxiCorp.

The stock surge came despite persistent bad news about the coronavirus and after three US states reported new daily deaths from the pandemic, as tensions continued to rise between the United States and China.

“Although the mismatch between financial markets and the real economy remains in full effect, the removal of a single recessive input (the virus) through a vaccine may pave the way for a rapid economic recovery,” added Innes.

“So the positive news about the vaccine can go a long way toward explaining the dissonance between the change in stock market sentiment regarding the distress on Main Street.”

Tensions between the United States and China are also growing, after United States President Donald Trump signed legislation and an executive order to hold China accountable for the national security law he imposed on Hong Kong.

The dollar was on the defensive, particularly against risk-sensitive currencies, following news of progress in vaccine development.

The euro () rose to $ 1.1423, the strongest since March 10 and not far from its peak so far this year of $ 1.1495.

The single currency has been helped by hopes that the European Union may agree at its summit later this week on a rescue financing package that will limit economic damage to the bloc from the coronavirus pandemic.

The strength of the euro helped push the () to 96,056, a one-month low.

The yen moved little to 107.27 per dollar , versus a two-week high of 106,635 before the Bank of Japan’s policy announcement later on the day it is expected to keep monetary policy stable.

Risk Sensitive Australian Dollar Increased 0.5% to $ 0.7009 .

There were still signs of caution among investors, as yields on the leading government debt in the United States and the euro zone fell and prices of safe gold consolidated gains above $ 1,800 an ounce.

it rose to $ 1,809 an ounce.

Oil prices rose on Wednesday after a sharp drop in US crude inventories. Brent () crude oil futures were up 10 cents at $ 43 a barrel, and US crude () futures were up 14 cents at $ 40.43 a barrel. [O/R]