Asia-Pacific Shares

Travel-Related Shares Drive Major Asia-Pacific Indexes Higher as Investor Hopes Rise on Vaccine Progress

The major Asia-Pacific stock indexes were mostly higher on Tuesday driven by strong performances by regional airlines, tourism and travel stocks as global investors aggressively bought the shares of companies expected to benefit greatly from a reopening of the global economy. The buying was fueled by global investors who applauded progress in the development of a coronavirus vaccine which lifted confidence in a world economic recovery.

In the cash market on Tuesday, Japan’s Nikkei 225 Index is trading 24905.59, up 65.75 or +0.26%. The Hong Kong Hang Seng Index is at 26191.68, up 175.51 or +0.67 and the South Korean KOSPI Index is at 2452.83, up 5.63 or +0.23%.

In China, the Shanghai Index is at 3360.95, down 12.78 or -0.38% and in Australia, the S&P/ASX 200 Index settled at 6340.50, up 41.70 or +0.66%.

Pfizer Vaccine Hopes Fuel Buying Spree

Asia-Pacific shares followed their U.S. counterparts higher in reaction to the announcement by Pfizer and BioNTech that their coronavirus vaccine was more than 90% effective in preventing COVID-19 among those without evidence of prior infection.

The reported efficacy rate was higher than expected, with scientists hoping for a coronavirus vaccine that is at least 75% effective, while White House coronavirus advisor Dr. Anthony Fauci has said one that is 50% or 60% effective would be acceptable.

Airline, Cruise Ship and Hotel Operators Lift Shares in Most of Asia

Pfizer’s vaccine announcement on Monday signaled to investors that a return to normality could be coming sooner rather than later. With the news, investors dumped tech-heavyweights that were expected to benefit from a stay-at-home-economy, and used the proceeds to purchase shares of stocks that would benefit from a return to the same economy before the pandemic.

Shares of airlines in the Asia-Pacific surged on Tuesday. In Australia, Qantas gained 8.55%. Over in Hong Kong, shares of Cathay Pacific popped 11.57% while China Eastern Airlines rose 8.54%.

Japan Airlines also saw its stock in Japan surge 18.77% while ANA Holdings advanced 15.78%. South Korea’s Korean Air Lines added 12.16% while Singapore Airlines shares in Singapore soared 13.99%.

China’s Inflation Fails to Perk Up, Defies Broader Recovery

China’s factory-gate prices fell at a sharper-than-expected pace in October, weighed by soft demand for fuel even as the trade and manufacturing sectors staged impressive recoveries from their COVID-19 slump.

Consumer inflation was also soft, easing to an 11-year low as pork prices snapped a year-and-a-half of steep increases that were fueled by critical shortages of the popular meat.

“We expect both CPI and PPI to be subdued in Q4,” said Zhaopeng Xing, markets economist at ANZ. “However, inflation will likely rebound after Q1 2021, thanks to the growing demand post the pandemic.”

For a look at all of today’s economic events, check out our economic calendar.

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James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.