Global stocks rise for second day on coronavirus vaccine hopes

BEIJING (AP) — Global stocks and United States (US) futures rose for second day yesterday on hopes for progress toward a possible coronavirus vaccine that might allow the world to revive manufacturing, shopping and normal life.

Market benchmarks in London, Frankfurt and Tokyo advanced while Shanghai closed lower. Japan’s benchmark Nikkei 225 has been trading at 29-year highs as shares rallied after Joe Biden was declared president-elect days after the US presidential election. News about possible progress on a COVID-19 vaccine have pushed prices still higher.

Investors were enthusiastic after Pfizer Inc said on Monday early data on a vaccine under development suggest it might be 90 per cent effective at preventing COVID-19, though that doesn’t mean its release is imminent.

“This offers a ray of hope that the market did not hesitate to take advantage of,” Tai Hui of JP Morgan Asset Management said in a report.

In early trading, the FTSE 100 in London rose 0.6 per cent to 6,222.92 while the DAX in Frankfurt added 0.2 per cent to 13,119.63. The CAC 40 in Paris gained 0.2 per cent to 5,352.98.

On Wall Street, the future for the benchmark S&P 500 index rose another 0.3 per cent and that for the Dow Jones Industrial Average was 0.1 per cent higher.

A woman walks by an electronic stock board of a securities firm in Tokyo. PHOTO: AP

On Monday, the S&P 500 advanced 1.2 per cent and the Dow surged 2.9 per cent after Pfizer indicated the company and its partner, BioNTech of Germany, are on track to file an emergency application for use of their vaccine with US regulators.

In Asia, the Nikkei 225 gained 0.3 per cent to 24,905.59 and the Hang Seng in Hong Kong rose 0.9 per cent to 25,243.16. The Shanghai Composite Index lost 0.4 per cent to 3,360.15 after spending most of the day in positive territory. Authorities said they have quarantined 186 people and conducted virus tests on more than 8,000 after a freight handler at the city’s main international airport tested positive for COVID-19.

No additional cases have been found, the city government said on its microblog yesterday. It remains unclear how the 51-year-old man contracted the virus, which has largely spared the sprawling metropolis despite its dense population and strong international links.

The Kospi in Seoul added 0.2 per cent to 2,452.83 and the S&P-ASX 200 in Sydney advanced 0.7 per cent to 6,340.50. India’s Sensex was 1.4 per cent higher at 43,190.99. New Zealand and Southeast Asian markets also rose.

Also yesterday, China reported October inflation fell to its lowest level in a decade.

That gives Beijing room to spend more or ease access to credit further to support an economic recovery that is strengthening.

The Philippines reported its economic output shrank by 11.5 per cent from a year earlier in the quarter ending in September.

Markets were relieved by the resolution to extended uncertainty about the battle for the US presidency. Over the weekend, Joe Biden clinched the final Electoral College votes to unseat President Donald Trump, though Trump has yet to concede.

Congress may be split between Democratic control of the House of Representatives and Republicans in the Senate. Investors appear to be hoping that might constrain a Biden administration’s possible moves on tax increases and regulatory changes.

The impact of Pfizer’s vaccine announcement highlighted the virus’ economic dominance, temporarily overshadowing concerns over who controls the US government. The number of confirmed US virus cases passed 10 million on Monday, the world’s highest total.