Asia-Pacific Shares Flip Higher as US Stimulus Hopes Offset COVID-19 Worries

by Warrior2

Developments around COVID-19 are likely to be watched by investors, as the world races to adapt against the mutating coronavirus.

The major Asia-Pacific stock indexes rose on Monday as concerns over rising COVID-19 cases and delays in vaccine supplies were eclipsed by expectations of a $1.9 trillion fiscal stimulus plan to help revive the U.S. economy.

Early in the session, Asian shares were on the defensive as rising coronavirus cases and doubts over the ability of vaccine makers to supply the promised doses on time soured risk appetite.

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Cash Market Performance

In the cash market on Monday, Japan’s Nikkei 225 Index settled at 28822.29, up 190.84 or +0.67%. Hong Kong’s Hang Seng Index finished at 30159.01, up 711.16 or +2.41% and South Korea’s KOSPI Index closed at 3208.99, up 68.36 or +2.18%.

In China, the Shanghai Index settled at 3624.24, up 17.49 or +0.48% and in Australia, the S&P/ASX 200 finished at 6824.70, up 24.30 or +0.36%.Advertisement

COVID-19 Update

Developments around COVID-19 are likely to be watched by investors, as the world races to adapt against the mutating coronavirus which has produced a number of potentially more infectious variants.

Globally, more than 99 million people have been infected by COVID-19 and at least 2,127,206 lives have been taken, according to data compiled by Johns Hopkins University.

Since Friday there has been one negative COVID-19 news story after another including President Biden’s forecast calling for U.S. deaths to rise over 500,000 in a month or two.

Hong Kong locked down an area of the Kowloon peninsula on Saturday, the first such measure the city has taken since the pandemic began while some countries including Mexico recorded their highest daily case numbers.

Reports the new UK COVID variant was not only highly infectious but perhaps more deadly than the original strain also added worries.

Vaccine Distribution Issues Increasing

In the European Union, political leaders expressed widespread dismay over a hold-up by AstraZeneca and Pfizer Inc in delivering promised doses, with Italy’s prime minister lashing out at the vaccine suppliers, saying delays amounted to a serious breach of contractual obligations.

Pfizer, last week, said it was temporarily slowing supplies to Europe to make manufacturing changes that would boost output. On Friday, AstraZeneca said that initial deliveries to the region will fall short because of a production glitch.

In the U.S., investors did see some hope after lawmakers agreed on Sunday that the most important priority should be producing and efficiently distributing a vaccine.

Australian shares were higher after the country’s drug regulator approved the Pfizer/BioNTech COVID-19 vaccine with authorities saying a phased rollout will begin late next month.

Investors Shrug Off COVID Concerns

The Democrats and Republicans are discussing a new $1.9 trillion in U.S. coronavirus relief.

Financial markets have been eyeing a massive U.S. economic stimulus though disagreements have meant months of indecision in a country suffering more than 175,000 COVID-19 cases a day with millions out of work.

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