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Stocks shoot up as vaccine progress, Biden transition boost confidence

  • Katanga Johnson

    Reuters

Washington   /   Tue, November 24, 2020   /   09:23 am
Stocks shoot up as vaccine progress, Biden transition boost confidence People wearing protective masks, following the coronavirus disease (COVID-19) outbreak, walk past a screen showing Nikkei index outside a brokerage in Tokyo, Japan November 5, 2020. (REUTERS/Kim Kyung-Hoon)

Asian stocks opened higher on Tuesday as COVID-19 vaccine progress shored up global sentiment and US President-elect Joe Biden was given the go-ahead to begin his White House transition.

US General Services Administration chief Emily Murphy wrote in a letter to Biden on Monday that he can formally begin the hand-over process.

President Donald Trump tweeted that he had told his team “do what needs to be done with regard to initial protocols,” an indication he was moving toward a transition after weeks of legal challenges to the election results.

That helped futures for the S&P 500 up 0.52 percent in early Asian trade while Japan’s Nikkei was 1.8 percent higher and Australia’s S&P/ASX 200 1.11 percent stronger.

Those gains followed an upbeat Wall Street session that was driven by positive vaccine news.

AstraZeneca said its COVID-19 vaccine, cheaper to make, easier to distribute and faster to scale-up than its rivals, could be as much as 90 percent effective.

US stocks got an extra boost after reports that Biden plans to nominate former Federal Reserve Chair, Janet Yellen, to become the next Treasury Secretary.

“Traders are still buying into vaccine news clearance, as the end of the pandemic becomes imaginable. Recent US data restored a bit of confidence that the economy is holding up, despite surging COVID-19 infections and a painful lack of fresh fiscal stimulus,” said Kyle Rodda, a market analyst for IG Australia.

“And the news of Yellen’s possible nomination to the role of US Treasury Secretary potentially puts a very Fed-friendly uber-dove at the reins of fiscal policy.”

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.27 percent.

The US dollar index touched its lowest since Sept. 1 before edging 0.214 percent higher with the euro unchanged at US$1.184.

On Wall Street, the Dow Jones Industrial Average rose 1.12 percent, the S&P 500 gained or 0.56 percent while the Nasdaq Composite added only 0.22 percent, underperforming as traders rotated away from big tech names.

Some analysts expect big, short-term risks ahead the US Thanksgiving holiday, although others say unexpected news events at the start of the shorter trading week helped investors focus on the growing positives for financial markets.

Oil prices added to last week’s gains as traders anticipated the vaccine news would spur a recovery in energy demand.

“Investors are ignoring near-term headwinds, chief among which are surging global COVID infections, and instead looking ahead to next summer,” said PVM analyst Stephen Brennock.

The United States surpassed 255,000 deaths and 12 million infections since the pandemic began, with daily infections at a record near 170,000 and daily deaths around 1,500.

US crude recently fell 0.26 percent to $42.95 per barrel and Brent was at $45.83, up 1.94 percent on the day.

An index of commodity prices touched its highest since early March.

The yield on the benchmark 10-year notes rose slightly to 0.8701 percent.

Spot gold was little changed at $1,835.21 an ounce. US gold futures fell 0.46 percent to $1,829.30 an ounce.