Global stocks jump as investors pin hopes on coronavirus treatment

0 321

Get real time updates directly on you device, subscribe now.

SYDNEY (Reuters) – Asian shares advanced for a second straight session on Monday, underpinned by coronavirus hopes after the U.S. Food & Drug Administration (FDA) authorised the use of blood plasma from recovered patients as a treatment option.

The announcement from the U.S. FDA of a so-called “emergency use authorization” came on the eve of the Republican National Convention, where Donald Trump will be nominated to lead his party for four more years.

E-Mini futures for the S&P500 ESc1 gained 0.3%.

MSCI’s broadest index of Asia-Pacific shares outside of Japan .MIAPJ0000PUS jumped 0.65%, moving toward a six-month high touched last week.

Japan s Nikkei .N225 reversed early losses to be last up 0.4%. Chinese shares rose too with the blue-chip CSI 300 index .CSI300 adding 0.8%.

South Korea s KOSPI .KS11, which has been on a slippery slope since hitting a more than two-year peak earlier this month, climbed 0.9%.

Sentiment was also supported by a Financial Times report 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.

“Markets are opening this morning to optimism on the therapeutics front after the FDA authorized the use of blood plasma from COVID-19 survivors to treat sick patients,” said Stephen Innes, chief global markets strategist at AxiCorp.

“Not the COVID-19 cure all the world is hoping for, but it is another positive step to help patient recovery time and get people back on their feet quicker.”

Analysts still urged caution with Wall Street indexes already at record highs even as the world economy struggled to recover from the once-in-a-century pandemic.

“With risks rising somewhat and September a full month for policy, the end of summer is a good time to cross-check valuations and to consider both threats and opportunities,” said JPMorgan cross asset analyst John Normand. Normand pointed to talks of a U.S. fiscal package, Fed’s upcoming policy review next month and the ramping up of the U.S. election campaign as risk events over coming weeks.

Looming large over this week was a keenly anticipated address by Federal Reserve Chair Jerome Powell at the Kansas City Fed Jackson Hole symposium, where he will talk on the Fed’s monetary policy framework review. “This takes on even more significance after the market’s evident disappointment last week,” said Ray Attrill, head of forex strategy at Melbourne-based National Australia Bank.

The Fed’s July meeting minutes last week barely made a mention of its policy outlook while “failing to give succour to expectations” that its September meeting would reveal a formal commitment to new outcome-based’ forward guidance, Attrill added.

In currencies, the dollar was a shade weaker on the safe haven Japanese yen JPY= at 105.74.

The British pound GBP= nursed losses after falling 0.9% on Friday on lack of progress in post-Brexit trade talks with the European Union. It was last at $1.3092.

Also on Friday came news that Britain’s public debt went above 2 trillion pounds ($2.65 trillion) for the first time in July as the government ramped up public spending to cope with the coronavirus pandemic and tax revenues fell.

The euro EUR= was defensive at $1.1800 after falling 0.5% on Friday following disappointing manufacturing activity data.

That left the dollar index unchanged at 93.154.

In commodities, oil prices rose on Monday, with Brent crude LCOc1 up 14 cents at $44.49 a barrel and U.S. crude CLc1 climbing 11 cents to $42.45.

Gold saw some selling pressure with spot prices XAU= off 0.4% at $1,931.54 an ounce.

Get real time updates directly on you device, subscribe now.

Leave A Reply

Your email address will not be published.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More