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Asia trades higher with investor sentiment supported by positive vaccine news - CNBC

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Asia Pacific markets mostly rose Tuesday after investor sentiment was supported by a slew of positive news on the coronavirus vaccine front.

In Japan, the Nikkei 225 gained 0.61% and the Topix index traded fractionally higher, up 0.06%. South Korea's Kospi index was up 1.34% while in Australia, the benchmark ASX 200 added 1.49%, with the heavily weighted financials subindex up 1.41%.

Hong Kong's Hang Seng index advanced 1.56% while the Straits Times index in Singapore gained 0.33% and the Jakarta Composite rose 0.83%. 

Chinese mainland shares bucked the positive trend in other parts of the region: The Shanghai composite fell 0.22% while the Shenzhen component index and the Shenzhen composite traded fractionally lower. 

The session in Asia followed overnight gains on Wall Street due to a strong performance in technology shares. U.S. futures pointed to opening gains on Tuesday. 

"Global equities kicked off the trading week on a positive note as vaccine hopes supported optimism," Felicity Emmett, a senior economist at ANZ, wrote in a morning note. 

Pfizer and BioNTech reported early positive data on a joint coronavirus vaccine candidate. Another candidate from Oxford University and AstraZeneca also showed a positive immune response in an early trial

The coronavirus pandemic, which was first reported in China late last year, has infected more than 14.6 million people and killed over 608,000. 

European leaders continued negotiations on Monday over an economic recovery fund to help countries combat the effects of the pandemic. Reuters reported that a proposal submitted to lift the bloc out of a Covid-19-induced recession included 390 billion euros of grants and 360 billion euros of loans. It is meant as a basis for a compromise agreement, the news wire said. 

Elsewhere, Moody's Investors Service said in a new report that Chinese companies' earnings were set to grow slower or even decline this year due to the pandemic's impact on economic growth before recovering in 2021. The largest downward revision was for companies in the auto and auto-related, oil and gas, and oilfield sectors. 

"We expect credit quality will weaken, especially for companies in vulnerable sectors that are most affected by reduced revenues, margins and disrupted supply chains," said Lina Choi, a senior vice president at Moody's, in a statement.

Currencies and oil

The U.S. dollar index, which measures the greenback against a basket of its peers, last traded at 95.691, declining from its previous close of 95.832. 

The dollar "remains heavy near the weakest levels since March," analysts at the Commonwealth Bank of Australia wrote in a morning note. 

"In the absence of market‑moving economic data this week, negotiations about the next round of economic stimulus will be in focus," they said. 

Elsewhere, the Japanese yen changed hands at 107.16, weakening from levels near 106.8 seen last week. The Australian dollar traded at $0.7025, climbing from levels near $0.6960 in the previous week. 

Oil prices traded higher Tuesday morning during Asian hours. U.S. crude traded up 0.15% at $40.87 a barrel while global benchmark Brent added 0.09% to $43.32. 

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Asia trades higher with investor sentiment supported by positive vaccine news - CNBC
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