(Investing.com) – Asia Pacific stocks were mostly up on Tuesday morning, following European and U.S. shares’ strong overnight performance after positive news about the development of a COVID-19 vaccine also lifted hope for the global economic recovery.
Pfizer Inc (NYSE:PFE)’s vaccine candidate, which is being co-developed with Germany’s BioNTech (F:22UAy), was more than 90% effective in preventing infection. The claim is backed by results from the first 94 people to be infected with COVID-19 in Pfizer’s large-scale clinical trial.
The news saw airline, tourism and travel stocks in the region climb higher earlier in the session, with Cathay Pacific Airways (OTC:CPCAY) Limited (HK:0293)’ Hong Kong shares up 14.9%, Japan Airlines (T:9201) soaring 7.6% higher and ANA Holdings (T:9202) jumping 16.4%.
“The clearing of the election fog has permitted underlying market fundamentals to come back into focus and the most recent vaccine news suggests a ‘return to normality’ should be coming sooner rather than later … all the chips are starting to line up, and market sentiment may be in the early stages of a burst of positive energy,” Principal Global Investors chief strategist Seema Shah told Bloomberg.
“Markets will remain on the lookout for more promising vaccine data in addition to news of a fiscal reboot,” PineBridge Investments portfolio manager Mary Nicola told Reuters, agreeing with Shah.
Despite the global enthusiasm over the news, other investors cautioned that vaccine availability and the ‘return to normality’ could still take time. Pfizer has yet to test the vaccine for efficacy and length of immunity provided.
“Given more tests are needed, then the approval process, manufacturing and distribution would mean the vaccine, if truly effective, is still months away from mass deployment,” JPMorgan (NYSE:JPM) Asset Management chief Asia market strategist Tai Hui told Reuters.
China’s Shanghai Composite edged up 0.12% by 11:36 PM ET (3:36 AM GMT) while the Shenzhen Component was down 0.79%. In contrast to the news from Pfizer, Sinovac Biotech Ltd (NASDAQ:SVA)’s final stage trials in Brazil for its own vaccine candidate Coronavac have been halted due to a serious adverse event that occurred on Oct. 29.
On the data front, figures for October’s Consumer Price Index (CPI) and the Producer Price Index (PPI) disappointed. CPI grew 0.5% year-on-year, against the forecast 0.8% and September’s 1.7%, while contracting 0.3% month-on-month, against the forecast and September’s 0.2% growth. The PPI contracted 2.1% year-on-year, against the forecast and September’s respective contractions of 2.0% and 2.1%.
Hong Kong’s Hang Seng Index rose 0.90%.
Japan’s Nikkei 225 was up 0.66%. Japanese Prime Minister Yoshihide Suga instructed his cabinet to design a fresh stimulus package earlier in the day, to boost the economy and mitigate the ongoing economic impact from COVID-19.