ASX set for bright start as Wall Street gets another vaccine boost
US stocks are higher in afternoon trading on Monday (US time) after investors received several pieces of encouraging news on COVID-19 vaccines and treatments, tempering concerns over rising virus cases and business restrictions.
The benchmark S&P 500 index rose 0.4 per cent, led by banks, industrial companies and other businesses that have been beaten down by the virus. The Dow Jones Industrial Average is 0.8 per cent higher while the technology-heavy Nasdaq composite has added 0.2 per cent.
The solid lead sets up the Australian sharemarket for a bright start to Tuesday’s session, with futures at 5.11am AEDT pointing to a gain of 28 points, or 0.4 per cent, at the open.
The latest vaccine developments are helping to raise hopes that some normalcy will eventually be restored to everyday life and the economy. It is also tempering lingering concerns about new government controls as the virus spikes in the US and globally.
Roughly 70 per cent of the stocks in the S&P 500 rose. The Russell 2000 index of smaller stocks outpaced the broader market and jumped 1.4 per cent in another signal that investors were feeling confident. The yield on the 10-year Treasury rose to 0.85 per cent from 0.81 per cent late Friday.
Many of the companies making gains would greatly benefit from a vaccine allowing people to travel, shop and dine out. Cruise line operator Carnival rose 3.1 per cent and hotel company Marriott gained 2.3 per cent. JPMorgan Chase rose 2.2 per cent
AstraZeneca is the latest drug developer to report surprisingly good results from ongoing vaccine studies. It said the potential vaccine, which is being developed with partner Oxford University, was up to 90 per cent effective. Unlike rival candidates, however, AstraZeneca’s doesn’t have to be stored at ultra-cold temperatures, making it easier to distribute.
Last week, Pfizer and Moderna both reported study results showing their vaccines were almost 95 per cent effective. And, over the weekend, Regeneron Pharmaceuticals received US government approval for emergency use of its COVID-19 treatment. The drug, which President Donald Trump received when he was sickened last month, is meant to try to prevent hospitalisation and worsening disease from developing in patients with mild-to-moderate symptoms.
In Europe, France’s CAC 40 rose 0.2 per cent, and Germany’s DAX returned 0.3 per cent. The FTSE 100 in London was flat. Asian stocks were mixed. Japan’s Nikkei 225 fell 1.1 per cent, but other markets were stronger. South Korea’s Kospi added 0.3 per cent, Hong Kong’s Hang Seng climbed 0.5 per cent and stocks in Shanghai added 0.2 per cent.
AP
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