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Asian Stocks Up Over Progress on Biden Transition, COVID-19 Vaccine

·3 min read

By Gina Lee – Asia Pacific stocks were mostly up on Tuesday morning, as clarity over the U.S. presidential elections finally begins to emerge almost a month after votes were cast on Nov. 3.

Japan’s Nikkei 225 rose 2.83% by 11:36 PM ET (3:36 AM GMT). South Korea’s KOSPI gained 0.90%, with the Bank of Korea due to hand down its policy decision on Thursday.

In Australia, the ASX 200 rose 1.15% and Hong Kong’s Hang Seng Index edged up 0.12%. Chief Executive Carrie Lam is due to deliver her annual policy address on Wednesday, as the city battles a fourth wave of COVID-19 cases.

China’s Shanghai Composite inched down 0.07% and the SZSE Component fell 0.36%. U.S.-China tensions are up over reports that U.S. President Donald Trump’s administration is pushing for fresh, hardline measures against China.

Joe Biden was acknowledged as the apparent winner of the election via a letter from General Services Administration head Emily Murphy on Monday. The letter also said that Biden could formally begin the transition process, which includes access to current agency officials, briefing books, and funding as well as other government resources totaling around $6 million.

Trump also made the first steps towards conceding to the election results, tweeting that his team have been informed to “do what needs to be done with regards to initial protocols.’ However, he is still looking to pursue legal action over the results.

Biden has also started hinting at his cabinet appointments and is likely to tap former Federal Reserve Chairman Janet Yellen as Secretary of the Treasury.

Adding to the positivity was the latest positive news on the COVID-19 vaccine front, after Pfizer Inc (NYSE:PFE) and Moderna Inc (NASDAQ:MRNA) announced positive news about their respective candidates during the previous week.

AstraZeneca PLC (LON:AZN), alongside the University of Oxford, reported on Monday that its candidate, AZD122, met its primary endpoint in clinical trials that took place in the U.K and Brazil. The data will now be submitted to authorities globally for conditional or early approvals.

“Traders are still buying into vaccine news clearance, as the end of the pandemic becomes imaginable. Recent U.S. data restored a bit of confidence that the economy is holding up, despite surging COVID-19 infections and a painful lack of fresh fiscal stimulus,” IG Australia market analyst Kyle Rodda told Reuters.

“And the news of Yellen’s possible nomination to the role of U.S. Treasury Secretary potentially puts a very Fed-friendly uber-dove at the reins of fiscal policy,” Rodda added.

Investors are also rekindling hope that Congress will reach a consensus over the latest stimulus measures as the number of global COVID-19 cases continues to rise.

“Having that end date on the calendar, with what looks like possibly three effective vaccines defines the bottom,” Brent Schutte, Northwestern (NASDAQ:NWE) Mutual Wealth Management Chief Investment Strategist, said on Bloomberg TV. “I think investors will come in and buy the dip, and I do think you will continue to have the rotation to those value names, small-cap names, things that are leveraged to the economic cycle.”

The U.S. is due to release a slew of data, including for jobless claims and GDP, on Wednesday ahead of the Thanksgiving holiday. The Fed will release the minutes from its most recent Federal Open Market Committee meeting on the same day. Data released on Monday showed that the U.S. manufacturing Purchasing Managers Index (PMI) rose to 56.7 in November, above the 53 in forecasts prepared by and October's 53.4 reading. The services PMI also exceeded expectations, rising to 57.7 in November.

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