Asian equities post modest gains

Moderna boosts Wall Street but Asia more subdued

The Moderna vaccine news lifted Wall Street overnight, with the S&P 500 rising 1.17%, the Nasdaq rising 0.80%, and the cyclical-heavy Dow Jones jumping 1.62%. In Asia though, the reception has been somewhat more subdued, notably amongst the more tech-heavy North Asia bourses. The Nikkei 225 and Kospi are up 0.25%. In China, the Shanghai Composite and CSI 300 have eased by 0.25% as the yuan was fixed at a 2.5-year high this morning.

ASEAN markets, being more heavily cyclical, have outperformed today. Bangkok is 0.70% higher, with Jakarta up 0.90%, and Manila 0.25% higher. Singapore had rallied by 1.0%, but Kuala Lumpur is flat, as its surgical glove sector weighs on the local index. Australian markets reopened today but have only posted modest gains with the Covid-19 outbreak in South Australia weighing on sentiment. The ASX 200 has crept 0.25% higher, with the All Ordinaries eking out a 0.15% gain. Europe should also be poised for a positive open, although the Covid-19 situation in their here and now will temper exuberance.

The Moderna vaccine update triggered another spurt of buying flow into super spreader sectors such as airlines. With Covid-19’s biblical comeback crashing over Iran, Russia, all of Europe, the US and Mexico, and others I’m sure I’ve missed, we will all still be working from home for some time to come, vaccine or no vaccine.

The continual procession of Covid-19 lockdown news from key Northern Hemisphere markets appears to be muting vaccine exuberance this morning. Having priced in two years of growth in two hours after the Pfizer announcement, momentum in the rotation trade has also reduced. Although vaccines will change the game in 2021, supporting ASEAN markets in particular, until we have a better picture of when social mobility will return, we are unlikely to see the fireworks of the post-Pfizer price action.

That said, equities will remain solidly supported on any short-term dips as we advance, on a combination of monetary policy and vaccine-led recovery.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

Latest posts by Jeffrey Halley (see all)