Asian shares jumped early today after US biotech firm Moderna Inc reported ‘positive’ phase 1 results for a potential COVID-19 vaccine. The experimental vaccine from Moderna induced an immune response in all 45 participants, boosting hopes that an effective tool to suppress the pandemic and normalise the economy could be on the horizon.
Australia’s S&P/ASX 200 and Hong Kong’s Hang Seng Index led gains among the region’s major markets, up 2% each. Mainland Chinese stocks also inched higher, with the Shanghai Composite Index up 0.72%, while the smaller-cap Shenzhen Composite advanced 0.8%. Meanwhile, benchmark indexes in Taiwan and Singapore were mixed.
In Japan, the Nikkei 225 increased by 1.68% in morning trade as shares of Fanuc, the world’s largest robot maker, soared with an increase of over 3.5%. This comes hot on the heels of a Monday data release that showed the export-oriented nation’s economy shrinking 3.4% year-on-year in the first quarter of 2020, after a 7.3% recession in the previous quarter. Although an improvement from the 4.8% pullback expected by economists, the coming quarter is projected to shrink by 20% or more, due to the state of emergency declared in April to contain COVID-19.
On Wall Street, S&P 500 announced its biggest one-day percentage gain in almost 6 weeks, gaining 3.15% as the easing of global lockdowns prompted a rise in oil demand.
“The mood is assertively risk-on with sentiments having been tipped over by fresh hopes sparked for a COVID-19 vaccine,” commented Jingyi Pan, market strategist for IG. “Lingering coronavirus implications remain the single biggest issue holding back the market from recovery and a contributor to other risk factors, including US-China tensions.”
There are currently no approved treatments for COVID-19, which has killed at least 312,009 and infected 4.6 million people worldwide since the outbreak was first identified in Wuhan, China over 4 months ago. Until a safe and effective vaccine is developed, the coronavirus will continue to suppress investor optimism.