Wall Street gains spill into Asia
Wall Street finished the week strongly on Friday, and that sentiment has spilled into the Asia-Pacific region this morning. Except for Singapore, the region’s stock markets are recording strong gains to start the week.
Gilead Sciences Inc. led Wall Street higher, following the positive results from its latest Remdesivir trial on Covid-19 patients. That sparked a wave of peak-virus optimism in stock markets, although I note that the trial was only 318 people with no control group. Still, why let science get in the way of a good story. The S&P 500 rose 1.05%, the Nasdaq made yet another record high close, climbing by 0.66%, and the Dow Jones jumped by 1.43%.
In Asia, the Nikkei and Kospi have started brightly, rising 0.90% and 1.45% respectively. Continuing profit-taking in financial market stocks has been offset by a rally in industrials in mainland China today. The Shanghai Composite and CSI 300 are both up around 1.0%, with the Hang Seng climbing 0.90%.
Across South East Asia, the picture is much the same except for Singapore. Although the PAP returned to power on Friday’s election, their total share of the popular vote was the lowest on record. That is hanging over the Straits Times today ahead of data this week. The index is down 0.15% thus far today.
Australian stock markets are higher, but the Victoria State lockdown and the prospect of deeper lockdowns for Melbourne, are limiting gains. The All Ordinaries is up 0.85%, with the ASX 200 up 0.75%.
Friday and today’s rallies are built on hope versus reality. We have been here many times before, though, and fighting the short-term momentum is a pointless exercise. Either stay on the sidelines or tactically join in the party. But leave your finger over the sell-button for the first sign of trouble. The sentiment is likely to ensure that European stocks open higher this afternoon as well.