Asian Stocks Up on Back of Potential COVID-19 Vaccine’s Positive Results

By Gina Lee – Asian stocks were up on Tuesday morning after Moderna (NASDAQ:MRNA) announced “positive” results for its potential COVID-19 vaccine.

The U.S. company said on Monday that all 45 phase one trial participants developed antibodies to the virus after two doses.

Hong Kong’s Hang Seng Index was up 1.68% by 11:25 PM ET (4:25 AM GMT), after gaining up to 2.38% earlier in the session.

Chinese stocks posted modest gains, with the Shanghai Composite up 0.52% and the Shenzhen Component up 0.76%.

President Xi Jinping said that China will provide $2 billion over two years to help other countries combat COVID-19 during the opening ceremonies for the World Health Assembly on Monday. Xi also said that when a vaccine for the disease is developed in the country, it “will be made a global public good.” 

Meanwhile, U.S. President Donald Trump also threatened to cut funding to the World Health Organization and withdraw U.S. membership.

Japan’s Nikkei 225 rose 1.49%, with Japanese industrial production data for March expected later in the day. This follows Monday’s data release that showed the Japanese economy shrinking at an annualized rate of 3.4% between January and March.

South Korea’s KOSPI gained 1.77%.

Down Under, the ASX 200 rose 1.68%. The Reserve Bank of Australia released the minutes from its May monetary policy meeting earlier in the day, which said that the board “would not increase the cash rate target until progress is made towards full employment and it is confident that inflation will be sustainably within the 2-3 per cent target band.”

U.S. Federal Reserve Chair Jerome Powell is scheduled to speak on the state of U.S. economic recovery from the virus on Tuesday. He is expected to press for future fiscal support.

Some investors struck an optimistic note as countries slowly continue to loosen lockdown measures and restart their economies.

“Short-lived bounces in stock prices even while markets establish new lows are not unheard of,” Ashwin Alankar, head of global asset allocation at Janus Henderson, said in a note.

But Alankar struck a more pessimistic note further in the note.

“Forward-looking metrics such as earnings revisions and options prices, on the other hand, sound a more cautious tone both for the economy and stock prices.”