Asian shares rise after Dow crests 30,000 on vaccine hopes; PSEi retreats on profit-taking

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ASIAN shares rose Wednesday after the Dow Jones Industrial Average closed above 30,000 points for the first time despite an ongoing pandemic, as progress in development of coronavirus vaccines kept investors in a buying mood.

Japan’s benchmark Nikkei 225 jumped 1.7 pecent to 26,607.63 in morning trading. Australia’s S&P/ASX 200 gained 0.7 percent to 6,691.80. South Korea’s Kospi added 0.5 percent to 2,630.04. Hong Kong’s Hang Seng surged 1.3 percent to 26,931.98, while the Shanghai Composite edged up 0.1 percent to 3,406.45.

However, Philippine share prices closed in the red on Wednesday as market players continued to cash in on gains after the local stock barometer hit a fresh eight-month high.

The bellwether PSEi shed 107.16 points or 1.51 percent to 7,002.51 at the closing bell. The broader All Shares lost 44.27 points or 1.05 percent to 4,184.28.

Jingyi Pan, senior market strategist at IG in Singapore, noted news that the transition of power in the U.S. to President-elect Joe Biden will finally begin, as well as his selection of former Fed chair Janet Yellen as Treasury secretary, were encouraging traders.

“While the vaccine optimism had changed the outlook for Asia markets hoping for a quicker recovery, the formal transition for the Biden administration alongside former Fed chair Janet Yellen’s expected lead of the U.S. Treasury had only served as embellishments contributing to expectations for a more conducive environment for the recovery,” Pan said.

The Dow rose more than 450 points, or 1.5 percent, to cross the milestone. The S&P 500 index, which has a far greater impact on 401(k) accounts than the Dow, rose 1.6 percent, climbing to its own all-time high.

The gains extend a monthlong market rally driven by growing optimism that development of coronavirus vaccines and treatments will loosen the pandemic’s stranglehold on the economy. They also mark a rapid climb for the Dow from its March 23 low of just under 18,600 during the worst of its early pandemic nosedive.

“We are one step closer to moving past the election uncertainty,” said Lindsey Bell, chief investment strategist at Ally Invest. “People are still optimistic about what 2021 has to bring, from an economic perspective and an earnings perspective.”

Traders continued to favor stocks that stand to gain the most from a gradual reopening of the economy, such as banks and industrial companies. Technology and communication stocks, which have been investor favorites through the pandemic, also helped lift the market.

“There’s some relief that Biden is choosing moderates to fill out the cabinet,” said Barry Bannister, head of institutional equity strategy at Stifel. Bannister also said the encouraging vaccine news continues to give hope there is an end in sight to the pandemic.

Several candidates are in development for a vaccine. Drugmaker AstraZeneca has said its potential vaccine, being developed with Oxford University, was up to 90 percent effective. Unlike rival candidates, AstraZeneca’s doesn’t have to be stored at ultra-cold temperatures, making it easier to distribute. Pfizer and Moderna have also reported study results showing their vaccines were almost 95 percent effective.

Regeneron Pharmaceuticals received U.S. government approval for emergency use of its Covid-19 treatment over the weekend.

The drug, which President Donald Trump received when he was sickened last month, is meant to try to prevent hospitalization and worsening disease from developing in patients with mild-to-moderate symptoms. (AP with reports from CSL)