Asian Stocks Up Over Vaccine and Global Economic Recovery Hopes for 2021

Asian Stocks Up Over Vaccine and Global Economic Recovery Hopes for 2021

© Reuters.  © Reuters.

By Gina Lee – Asia Pacific stocks were mostly up on Thursday morning, ending a roller-coaster 2020 by staying at record highs after a third COVID-19 vaccine received regulatory approval.

The U.K.’s Medicines and Healthcare products Regulatory Agency on Wednesday approved AZD1222 for emergency supply and active immunization of individuals 18 years or older. The vaccine, developed by AstraZeneca PLC (LON:AZN) and the University of Oxford, is the second jab to be approved in the U.K. after Pfizer Inc (NYSE:PFE) and BioNTech SE's (F:22UAy) vaccine BNT162b2 was approved earlier in the month.

Moderna Inc's (NASDAQ:MRNA) mRNA-1273 vaccine also received U.S. FDA approval on Dec. 18.

Meanwhile, the new B177 strain of the COVID-19 virus first seen in southeastern England in September continues to spread worldwide. In the U.S., California reported its first strain and there is a possible second case in Colorado. In Asia, two people in Singapore could possibly be infected with the strain.

China’s Shanghai Composite rose 1.25% by 9:55 PM ET (2:55 AM GMT) and the Shenzhen Component jumped 1.35%. Chinese factory activity grew at a slower pace, with data released earlier in the day showing December’s manufacturing Purchasing Managers Index (PMI) at 51.9, down from the reading of 52 in forecasts prepared by and November’s 52.1 figure.

The data also showed December’s non-manufacturing PMI at 55.7, also down from November’s reading of 56.4.

Hong Kong’s Hang Seng Index was up 0.25% while in Australia, the ASX 200 was down 0.82%.

Japanese and Korean markets were closed ahead of the new year.

Global shares and other risk assets have seen sky-high valuations in 2020 over hopes that a vaccine rollout will stem the spread of COVID-19 and put global economies on the road to recovery in 2021, alongside unprecedented levels of stimulus rolled out globally.

“Investors continue to weigh stimulus hopes against negative pandemic developments,” Tom Essaye, “The Sevens Report” newsletter founder, said in a note.

“Markets have aggressively priced in a lot of positive resolution to these events (and more) in 2021,” the note added.

U.S. weekly jobless claims data is due to be released later in the day.

However, some investors are ending the year with a warning that there could be much less room for further appreciation in 2021, given the records seen in 2020.

“We’d say 80% of all the baseline good news expected in 2021 is already incorporated,” DataTrek Research analysts said in a note.

The noted added that some “real surprises” would be needed next year for the U.S. stock market to rise another 10%.

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