Asian markets mostly higher on hopes for coronavirus vaccine

Business News

A man wearing a face mask walks past a bank’s electronic board showing the Hong Kong share index in Hong Kong, Tuesday, July 14, 2020. Asian shares fell Tuesday as skepticism set in about the recent upbeat mood on global markets, as newly confirmed coronavirus cases rose in the U.S., Brazil and parts of Japan. (AP Photo/Kin Cheung)

Shares were mostly higher in Asia on Wednesday as investors were encouraged by news that an experimental COVID-19 vaccine under development by Moderna and the U.S. National Institutes of Health revved up people’s immune systems just as desired.

Tokyo’s Nikkei 225 advanced 1.4% to 22,912.24, while the Kospi in South Korea added 0.6% to 2,196.47. In Australia, the S&P/ASX 200 added 1.4% to 6,025.50. Hong Kong’s Hang Seng edged 0.1% lower to 25,465.94, while the Shanghai Composite Index slipped 1.3% to 3,369.94. Shares were mixed in Southeast Asia and rose in Taiwan.

The Bank of Japan was due to issue a policy statement on Wednesday but not expected to make any significant changes in its ultra-easy monetary stance. Investors also are awaiting April-June economic growth data for China, which is due later in the week.

Japan’s central bank has remained stalwartly ready to pump still more stimulus into the economy which looks likely to slide deeper into recession, Mizuho Bank said in a commentary.

Its top priority will be getting credit to companies, it said.

Scientists soon will begin a 30,000-person study to see if the experimental vaccine developed by Moderna and the NIH is strong enough to protect against the coronavirus.

News about the vaccine came after the end of trading for U.S. markets, where after another day of unsettled trading the S&P 500 rose 1.3% to 3,197.52. The Dow Jones Industrial Average added 2.1% to 26,642.59, lifted by gains for UnitedHealth Group and Caterpillar, among others.

Upbeat earnings news is helpful, “But the cherry on top has to be the positive virus vaccine update as optimism on the vaccine is more than a show stopper. Its the ultimate recession stopper,” Stephen Innes of AxiCorp said in a commentary.

“The positive coverage on a potential Covid-19 vaccine represents a rotating carousel of positive news that is overwhelming rising virus cases in the U.S.,” he said.

On Wall Street, big tech-oriented stocks lagged behind, holding the Nasdaq composite to a more modest gain of 0.9% to 10,488.58.

The earnings reporting season has kicked off with three of the nation’s biggest banks painting a mixed picture of how badly the coronavirus pandemic is ripping through their businesses.

Like the broader market, financial stocks drifted between gains and losses for much of the day before turning higher in the afternoon. JPMorgan Chase, Wells Fargo and Citigroup said they collectively set aside nearly $27 billion during the second quarter to cover loans potentially going bad due to the recession.

JPMorgan Chase rose 0.6% after it said it made a record amount of revenue from April through June. Its profit for the latest quarter also beat analysts’ forecasts, even though it roughly halved from a year ago.

Wells Fargo, though, dropped 4.6% after it said it expects to cut its dividend. “Our view of the length and severity of the economic downturn has deteriorated considerably,” CEO Charlie Scharf said.

Citigroup fell 3.9% after CEO Michael Corbat said its overall business performance was strong last quarter, though net income dropped 73% from a year ago largely due to the $7.9 billion it set aside for loans potentially going bad.

The yield on the 10-year Treasury held at 0.63% after rallying back from a morning dip on Tuesday to 0.60%. It tends to move with investors’ expectations of the economy and inflation.

Benchmark U.S. crude oil rose 25 cents to $40.54 per barrel in electronic trading on the New York Mercantile Exchange. It gained 19 cents to settle at $40.29 per barrel on Tuesday. Brent oil, the international standard, picked up 27 cents to $43.17 per barrel. It rose 18 cents to $42.90 a barrel in London.

In currency dealings, the dollar bought 107.24 Japanese yen, up from 107.23 yen late Tuesday. The euro also was almost unchanged, rising to $1.1405 from $1.1401.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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