GLOBAL MARKETS-Asian stocks rally as investors applaud vaccine development

By Scott Murdoch and Lawrence Delevingne
HONG KONG/BOSTON, Nov 10 (Reuters) - Asian share markets
mostly shot higher on Tuesday driven by regional airline,
tourism and travel stocks as global investors applauded progress
in the development of a coronavirus vaccine which lifted
confidence in a world economic recovery.
Pfizer Inc PFE.N said its COVID-19 vaccine, developed with
German partner BioNTech SE BNTX.O , was more than 90% effective
in preventing infection, marking the first successful results
from a large-scale clinical trial. "Markets will remain on the lookout for more promising
vaccine data in addition to news of a fiscal reboot," PineBridge
Investments portfolio manager Mary Nicola told Reuters.
The vaccine news sparked renewed optimism in equities around
the world but oil prices slipped in Asian trade after posting
the biggest one-day percentage gain in five months.
However, some analysts sounded caution over the speed in
which the vaccine could be implemented.
"Given more tests are needed, then the approval process.
Manufacturing and distribution would mean the vaccine, if truly
effective, is still months away from mass deployment," said Tai
Hui, chief Asia market strategist at JPMorgan Asset Management.
Brazil's health regulator said on Monday it had suspended
clinical trials for China's Sinovac coronavirus vaccine after
adverse effects had emerged. Japan's Nikkei 225 .N225 rose 1.1% after reaching a
29-year high in early trade and Australia's S&P/ASX 200 .AXJO
rose 1.6%.
Hong Kong's Hang Seng index futures .HSI was up 1% in
early trade but there was marginal weakness in China as the
CSI300 Index .CSI300 slipped by 0.24%. MSCI's broadest index
of Asia-Pacific shares outside Japan .MIAPJ0000PUS was 0.12%
higher.
Airline, travel and tourism stocks across Asia were
beneficiaries of the optimism prompted by the vaccine
announcement.
Qantas Airways QAN.AX gained 8.6% to hit its highest level
since March, Japan Airlines 9201.T shot 17.6% higher and ANA
Holdings 9202.T rose 16.4%.
In Hong Kong, Cathay Pacific Airways 0293.HK shares jumped
14.9%, the best since July.
"Markets will get ahead of themselves in the short term with
the vaccine news but longer term it feels like it is going
higher," Ord Minnett advisor John Milroy said from Sydney.
Early Tuesday, Japan's Prime Minister Yoshihide Suga
instructed his cabinet to design a fresh stimulus package to
help revive the nation's flagging economy to offset the ongoing
effects of coronavirus. The stronger performance on Asian markets followed the
positive lead overnight from the United States and Europe.
On Wall Street, the Dow Jones Industrial Average .DJI rose
2.95%, the S&P 500 .SPX gained 1.17% while the Nasdaq
Composite .IXIC dropped 1.53%. E-mini futures for the S&P 500
EScv1 rose 0.47%.
Pfizer's announcement jolted European shares to an
eight-month high, building on expectations of more stable trade
policies following the U.S. election. While stocks have also rallied on the assumption that
Democrat Joe Biden would be the next U.S. President, the top
Republican in U.S. Congress on Monday did not acknowledge Biden
as president-elect, raising concerns about a rough transition of
power.
Senator Mitch McConnell said in a speech that President
Donald Trump was well within his rights to look into charges of
election "irregularities" but did not offer any evidence of
fraud. The Australian dollar AUD= fell 0.18% versus the greenback
at $0.7272.
The yen strengthened 0.3% to 105.03 per dollar, while
sterling GBP= was last trading at $1.3174, up 0.09% on the
day.
The vaccine news also sent long-dated U.S. Treasury yields
sky-rocketing in their biggest one-day jump since March. The
yield curve, an indication of risk appetite, hit its steepest
level since March. Bonds had their biggest selloff since recoiling from March
peaks. The yield on benchmark 10-year U.S. government debt
US10YT=RR , which rises when prices fall, jumped 10.3 basis
points on Monday and held above 0.9% on Tuesday at 0.9099%
The CBOE Market Volatility index .VIX , a barometer of
investor anxiety, hit its lowest closing level since late
August.
Oil prices surged, posting their biggest daily percentage
gain in more than five months as the vaccine news and an OPEC
output deal fueled optimism about rebounding demand.
However, in Asian trade some of the momentum fell away.
Light crude oil CLc1 fell by 1.49% during the Asian
session to $39.69 a barrel while brent crude LCOc1 slipped
1.25%.
Spot gold XAU= added 0.32% to $1,867.6 an ounce.

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