SYDNEY (Reuters) – Asian stocks advance for a second straight session on Monday, backed by hopes of coronavirus, after the U.S. Food & Drug Administration (FDA) authorized the use of recovering patients’ blood plasma as a treatment option.
FILE PHOTO: A man wearing a protective face mask follows the outbreak of coronavirus (COVID-19) disease, running for a share for a quote card outside a broker in Tokyo, Japan, May 18, 2020. REUTERS / Kim Kyung-Hoon
The US FDA’s announcement of a so-called “emergency use authorization” came on the eve of the Republican National Convention, where Donald Trump will be nominated to lead his party for another four years.
E-Mini futures for the S & P500 gained 0.3%.
MSCI’s broadest index of shares in Asia-Pacific outside Japan jumped 0.65%, reaching a six-month high last week.
Japanese Nikkei reversed early losses to last 0.4%. Chinese shares also increased with the blue-chip CSI 300 index adding 0.8%. South Korea’s KOSPI, which has been on a slippery slope since hitting a more than two-year high earlier this month, climbed 0.9%.
Sentiment was also backed by a Financial Times report that the Trump administration is considering passing normal U.S. regulatory standards to track down a UK-based experimental coronavirus vaccine for use in America ahead of the presidential election.
“Markets opened this morning for optimism on the therapeutic front after the FDA authorized the use of COVID-19 survivors’ blood plasma to treat sick patients,” said Stephen Innes, chief global market strategist at AxiCorp.
“Not the COVID-19 cure that the whole world is hoping for, but it’s another positive step to help patients’ recovery time and get people back on their feet faster.”
Analysts still called for caution with Wall Street indices already at record highs, even as the world economy struggled to recover from the once-century pandemic.
“With risks rising slightly and September a full month for policy, the end of the summer is a good time to cross ratings and consider both threats and opportunities,” said John Normand, analyst at JPMorgan.
Normand pointed to talks on a fiscal package in the US, the Fed’s forthcoming policy review next month and the promotion of the US election campaign as a risk event over the coming weeks.
Major arrived this week was a highly anticipated address by Federal Reserve Chairman Jerome Powell at the Kansas City Fed Jackson Hole symposium, where he will discuss the evaluation of the Fed’s monetary policy framework.
“This adds even more importance to the market’s obvious disappointment last week,” said Ray Attrill, head of forex strategy at Melbourne-based National Australia Bank.
The minutes of the July meeting of the Fed last week made little mention of its policy release, while “did not give expectation” that its meeting in September would reveal a formal commitment for new baseline forwarding, Attrill added.
In currency, the dollar was a shadow weaker on the safe haven Japanese yen at 105.74.
The British pound lost losses after falling 0.9% on Friday due to lack of progress in talks following the Brexit trade with the European Union. It was last priced at $ 1.3092.
Also on Friday came news that Britain’s public debt exceeded £ 2 trillion ($ 2.65 trillion) for the first time in July when the government raised public spending to curb the coronavirus pandemic and tax revenues fell.
The euro was defensive at $ 1.1800 after 0.5% fell on Friday after disappointing data on manufacturing activity. That did not change the dollar index to 93,154.
In commodities, oil prices rose on Monday, with Brent crude up 14 cents at $ 44.49 per barrel and US crude climbing from 11 cents to $ 42.45. [O/R]
Gold saw some selling pressure with spot prices of 0.4% at $ 1,931.54 an ounce.
Report by Swati Pandey; Edited by Shri Navaratnam
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