Stocks Rally As Vaccine Hope, Recovery Signs Offset New Lockdowns

Business Report

Hong Kong: Equities rose Thursday following a record lead from Wall Street, with investors cheered by hopes for a vaccine, more positive economic data and further lockdown easing in Europe.

The developments helped offset a worrying spike in infections in the United States, which has led to the reimposition of containment measures that could slow recovery in the world‘s top economy, and warnings of worse to come.

Hong Kong led the gains on reopening after a one-day break.

The Hang Seng Index rose almost three percent, while Shanghai ended up 2.1 percent.

Sydney, MumbaiSeoulWellington and Bangkok were all up more than one percent, while Manila also chalked up more than two percent gains.

Taipei, Singapore and Jakarta were all in positive territory.

Tokyo ended up 0.1 percent with signs of a flare-up in new cases in the Japanese capital weighing on sentiment.

London rose 0.9 percent in early trade, while, Paris and Frankfurt each added more than one percent.

The gains came after another all-time high for the tech-heavy Nasdaq on Wall Street, with investors now awaiting the release of key US June jobs data later in the day for a better grip on the economy following May‘s surprise jump in employment.

There was some cheer as figures from payroll services firm ADP showed a 2.37 million increase in private jobs, slightly below forecasts, though it added that 3.06 million posts were created in May, a revision from its initial report of 2.76 million lost.

Adding to signs that the worst of the economic hit may have passed, US factory activity began growing again, while the rise in German retail sales was four times more than expected in May.

Meanwhile, hopes for a vaccine were given a boost after Germany‘s BioNTech and US pharmaceutical giant Pfizer reported positive preliminary results from a joint project, which showed positive antibody responses.

“Investors largely are shrugging off higher cases… as Pfizer reported positive results from a vaccine trial,” said Neil Wilson at Markets.com.

“We have been here before – it’s too early to get too excited – but a working vaccine is the holy grail as it would allow real normality to return to the economy.”Europe continued with its lockdown easing, with the EU reopening its borders to visitors from 15 countries, while Spain and Portugal held a ceremony to free up their land border.