Asian stocks mixed as investors weigh ‘virus vs. vaccine’
Asian stocks were mixed as investors weighed up rising coronavirus cases and new measures to curb them with hopes that a vaccine could soon be ready.
Equities fell in Japan by 0.5 per cent after Tokyo warned about a record rise in daily coronavirus cases. The warning prompted fears that further restrictions could soon be on the way.
Hong Kong’s Hang Seng index fell 0.4 per cent and Singapore’s STI was also lower.
However, China’s SSE Composite index rose 0.3 per cent, with shares in South Korea also rising.
Investors have been pulled in different directions in recent days. On one hand, coronavirus cases are rising sharply around the world. New measures are being put in place which are slowing economies dramatically.
On the other, drug companies Moderna and Pfizer have both said their vaccines are more than 95 per cent effective. They are seeking emergency use authorisation from governments.
Dollar rises as uncertainty returns
The US dollar rose 0.2 per cent against a basket of other currencies as Asian stocks struggled for direction. It suggested that investors were seeking a safe asset.
US stocks were set for a mixed start, according to futures prices. European stocks were set to open broadly lower.
“With infection and hospitalisation rates rising, and the risk that current lockdown restriction… remain in place… the probability that any economic damage will become permanent is only likely to increase,” said Michael Hewson, chief market analyst at CMC Markets.
“These risks then need to be offset by the longer-term benefits of a workable vaccine.” Hewson added: “Which, even if starting to get rolled out next year, could take up to two years to really make a difference.”
“Investors need to make a calculation in balancing the risks of the virus vs. the vaccine.”