SINGAPORE/HONG KONG- Asia’s stock markets were mostly higher on Tuesday as investors cheered signs of progress in US-China trade negotiations and following a fresh Wall Street rally.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.32 percent to its highest since early January and sits just a fraction below a two-year high.
Japan’s Nikkei was trading 1.5 percent higher and banking stocks led Australia’s S&P/ASX 200 up 0.58 percent.
The Hang Seng Index in Hong Kong was an outlier in early trade, slipping 0.27 percent while the Shanghai Composite was 0.15 percent firmer.
Markets worldwide were boosted when US regulators on Sunday authorized the use of blood plasma from recovered COVID-19 patients as a treatment option, helping the S&P 500 1 percent higher to another record close overnight.
The positive tone across Asian markets on Tuesday follows reports that top US and Chinese officials see progress being made in resolving concerns around the Phase 1 trade deal reached between the two countries in January.
Ord Minnett investment advisor John Milroy said equities market sentiment remained driven by elevated global liquidity levels.
“The strong rebound in markets continues to be driven by the large amounts of money governments and central banks keep throwing at the system,” Milroy said.
“There is no reason to expect markets to stop anytime soon even in the face of reduced global activity levels. Investors keep looking ahead with markets trading well above historical price to earnings levels.”
The US Food and Drug Administration’s move to allow the blood plasma treatment was hailed by President Donald Trump. Shares of AstraZeneca also rose on a Financial Times report that the US government was considering fast-tracking its experimental vaccine.
That seemed to overshadow a rise in coronavirus cases in Europe and the first documented case of human re-infection with COVID-19, where a man in Hong Kong caught the virus again some four months after first being infected.
Also on Monday, top US infections diseases expert Anthony Fauci also told Reuters that rushing out vaccines could undermine trials of other promising candidates.
In currency markets, the dollar, which has been sensitive to sentiment in equity markets edged higher, defying pressure from a gain in stocks that often leads investors to sell dollars for riskier currencies. — Reuters