Stocks push higher on vaccine hopes but gains lose steam

Stocks push higher on vaccine hopes but gains lose steam

26 November 2020 03:17 pm

Asian shares extended this month’s stellar gains as market euphoria over COVID-19 vaccines and expectations that US President-elect Joe Biden’s administration would deliver more economic stimulus overrode weak US economic data.

But Thursday’s gains were more modest than in recent days.

MSCI’s broadest index of Asia Pacific shares outside Japan rose 0.39 percent while Japan’s Nikkei gained 0.91 percent.

European stock futures eked out gains of 0.30 percent before the start of cash equity trading.

MSCI’s broadest gauge of the world’s shares covering 49 markets added 0.15 percent, bringing gains so far this month to 12.8 percent, on course for a record monthly increase.

The rally started after Democrat Biden’s United States election victory earlier this month raised hopes for more government spending to support the pandemic-hit economy and for more policy predictability after four years of Donald Trump’s presidency.

“Reduced policy uncertainties are helping markets. It will be easier for companies to make capital expenditures,” said Arihiro Nagata, general manager of global investment at Sumitomo Mitsui Bank.

“It’s true that stock prices are quite expensive but markets are finding fewer and fewer reasons to sell them. In this environment, you can’t make profits by selling. The only question to ask is what assets you should buy.”

But some analysts cautioned that many questions about the timing of the rollout of recently announced COVID-19 vaccines, and how they may help the global economy.
“While the release of vaccine results is promising, we do not know yet when this pandemic will be completely over and that is what investors will continue to struggle with,” Hussein Sayed, chief market strategist at research firm FXTM, said in a note sent to Al Jazeera.

US pharmaceutical giants Pfizer, Moderna and AstraZeneca and others in China and Russia have announced highly encouraging results in trials for their coronavirus vaccine candidates in recent weeks. These have raised hopes among investors that consumer-related industries such as travel, retail and restaurants will be able to return to full capacity.

US S&P 500 futures rose 0.2 percent in Thursday’s Asian trade while Nasdaq futures rallied 0.4 percent.

On Wall Street on Wednesday, the S&P 500 index shed 0.16 percent and the Dow Jones Industrial Average 0.58 percent, though the tech-heavy Nasdaq Composite increased 0.47 percent.

AL JAZEERA