Vaccine news prompts Asian share rally but signs of weakness emerge By Reuters

By Scott Murdoch

HONG KONG (Reuters) – Asian share markets mostly rose on Tuesday as global investors applauded successful trial data for a coronavirus vaccine, although expected delays to any mass roll-out took the gloss off early gains.

European futures trading during the Asian session were indicating a weaker open of at least 1.2%, while U.S. futures showed a potential fall of at least 0.5% after Monday’s steep market gains.

The positive tone in Asian equities came after Pfizer Inc (NYSE:) said its COVID-19 vaccine, developed with German partner BioNTech SE (NASDAQ:), was more than 90% effective in preventing infection, marking the first successful results from a large-scale clinical trial.

Major Asian markets soared on the vaccine news before weakening later in the session.

225 ended up nearly 0.3% after being 1.1% higher in early trading, touching a 29-year high.

Australia’s S&P/ASX 200 closed 0.66% higher after trading up as much as 1.6%, while Hong Kong’s was at 0.77% in the afternoon after rising 1% in early trade.

Singapore’s Straits Times gained 2.94% to take the index to its highest point since June.

Despite the optimistic tone across the region, there was some weakness in China, with the CSI300 Index slipping 0.17%.

Analysts attributed the decline to the heavy exposure of China’s indices to tech stocks, which came under pressure as investors eyed less consumer reliance on technology if a vaccine leads to an easing of movement restrictions.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.1% higher.

“The market is looking forward to a more sustained solution to the pandemic and that is why we have seen such a sharp reaction,” said Tai Hui, chief Asia market strategist at JPMorgan (NYSE:) Asset Management

However, he sounded caution over the speed in which the vaccine could be implemented.

“Given more tests are needed, then the approval process. Manufacturing and distribution would mean the vaccine, if truly effective, is still months away from mass deployment,”

The equities optimism was not shared across all asset classes. Oil prices slipped in Asian trade after posting the biggest one-day percentage gain in five months.

The overnight rise prompted some traders to take profits, analysts said.

Brazil’s health regulator said on Monday it had suspended clinical trials for China’s Sinovac coronavirus vaccine after adverse effects had emerged.

STOCKS ROTATION

Airline, travel and tourism stocks across Asia were beneficiaries of the positive sentiment from the vaccine announcement and held their gains while the broader indices weakened in the afternoon.

“No surprises but it’s essentially a rotation … what was bought in the last eight months is now being sold and what was sold is being bought,” Citigroup (NYSE:) global markets director Elizabeth Tian said.

Qantas Airways closed 8.3% higher to hit its highest level since March, Japan Airlines shot 20.6% higher and ANA…