Stocks in Asia Pacific jumped on Tuesday afternoon after American biotech firm Novavax said Monday it started the first human study of its experimental coronavirus vaccine.
Japanese shares led gains among major markets in the region, with the Nikkei 225 up 2.39% as shares of index heavyweight Fast Retailing jumped more than 4.5%. The Topix index also gained 1.81%. The moves came after Japan's Prime Minister Shinzo Abe announced Monday that the state of emergency will be lifted in the last five of the country's 47 prefactures, according to state broadcaster NHK.
Hong Kong's Hang Seng index also saw robust gains, adding 1.87% by the afternoon. Mainland Chinese stocks edged higher, with the Shanghai composite up 0.71% while the Shenzhen composite advanced 1.616%.
South Korea's Kospi also gained 1.55% as shares of LG Chem surged more than 5%. Meanwhile, shares in Australia jumped, with the S&P/ASX 200 up 2.12%.
Overall, the MSCI Asia ex-Japan index rose 1.61%.
Investors watched for market reaction to the announcement from Novavax, where the firm said it expects initial results on safety and immune responses in July. That comes on the back of Moderna's recent report of a positive development in its vaccine trial where all 45 participants had developed coronavirus antibodies.
Globally, more than 5.4 million people have been infected by the coronavirus so far while at least 344,000 lives have been taken, according to data compiled by Johns Hopkins University.
JPMorgan Asset Management's Kerry Craig told CNBC's "Squawk Box" on Tuesday that the market's focus has shifted "from thinking about the viral risk to think about the political risk" in recent days as U.S.-China tensions reignite.
"As more economies open up, as we see more business surveys, consumer surveys and economic data point to April being the low. You have seen the markets start to recover, look at that light at the … end of the tunnel and then think about better prospects for the markets," said Craig, who is global market strategist at the firm. That has resulted in markets moving higher despite a "re-invigoration" of political risk, particularly between the U.S. and China, he added.
"Political risk is gonna be with us for some time, it's gonna add to that market volatility, it really is a case of how much investors are gonna be desensitized to it and rather focusing on the improving economic outlook that comes through and the potential for gains as we enter this new cycle … and the long run return for equities could be potentially possible," said Craig.
In economic news, Singapore cut its 2020 economic forecasts for the third time this year. The Singapore economy is now expected to shrink by between 4.0% and 7.0% this year, according to the country's Ministry of Trade and Industry.
The U.S. dollar index, which tracks the greenback against a basket of its peers, last traded at 99.627 after declining from levels above 100 last week.
The Japanese yen traded at 107.81 per dollar following a weakening from levels below 107.2 in the previous trading week. The Australian dollar changed hands at $0.6571 after dipping from highs above $0.658 seen last week.
OIl prices were higher in the morning of Asian trading hours, with international benchmark Brent crude futures up 1.38% to $36.02 per barrel. U.S. crude futures also gained 2.95% to $34.23 per barrel.
What's on tap for Tuesday:
- Singapore: Consumer Price Index for April at 1:00 p.m. HK/SIN
— CNBC's Yun Li contributed to this report.
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May 26, 2020 at 11:42AM
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Japan jumps more than 2% as it lifts state of emergency; Asia Pacific stocks up on vaccine hopes - CNBC
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