Asian Stock Market: Bulls keep the reins amid virus treatment

Asian markets remain hopeful of the coronavirus cure, chatter concerning WeChat adds to the market optimism.
Auckland’s level 3 lockdown extended till August 30, Virus figures recede in Victoria and China.
The economic calendar remains mostly silent ahead of the key Jackson Hole Symposium.

Anil Panchal FXStreet

Asian shares remain positive as the news that the US Food & Drug Administration (FDA) authorized the use of blood plasma from recovered patients as a treatment option, shared by Reuters, favored the market optimism. Also supporting the risk-on mood could be the receding coronavirus (COVID-19) numbers from Victoria and China. Furthermore, rumors about Japanese Prime Minister Shinzo Abe challenged the risk-tone ahead of Cabinet Secretary Suga’s comments terming the PM’s hospital visit as follow-up tests.

Furthermore, the Financial Times’ report saying that the Trump administration is considering by-passing normal U.S. regulatory standards to fast-track an experimental coronavirus vaccine from the UK for use in America ahead of the presidential election added strength to the vaccine hopes.

Additionally, speculations that the US is secretly going easy on China also favor the market’s positive trading sentiment. “People familiar with the matter said President Donald Trump’s team is privately seeking to reassure U.S. companies that they can still do business with the WeChat messaging app in China,” said Bloomberg.

Against this backdrop, MSCI’s index of Asia-Pacific shares outside Japan rises 0.75% ahead of Monday’s European session. At the same time, Japan’s Nikkei 225 and Australia’s ASX 200 gain near 0.20%. That said, Victoria’s virus cases dropped to 116 whereas China marked the eighth day of no local infections, per Reuters. The same help stocks in China and Hong Kong to gain around 1.0% and be the Asian leaders as we write.

Elsewhere, New Zealand’s (NZ) Prime Minister stretched Auckland’s level 03 lockdown till August 30. Earlier during the day, NZ second quarter (Q2) Retail Sales slumped -14.6% QoQ but was largely ignored amid obvious contraction due to the pandemic. As a result, NZX 50 gains 0.73%.

It’s worth mentioning that a light calendar and broad risk-on mood helped S&P 500 Futures to cross February month’s record high while breaking the 3,400 threshold and flashing a new landmark. However, the US 10-year Treasury yields remained pressured under 0.70%.

Looking forward, a lack of major data/events may offer a little momentum ahead of the much-awaited annual Jackson Hole Symposium of the global central bankers.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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