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Asian Markets Advance On Coronavirus Vaccine Optimism

asiancommentary jan15 13sep20 lt

Asian stock markets are advancing on Monday despite the mixed cues from Wall Street Friday, as positive news on the coronavirus vaccine front boosted sentiment. Drug maker AstraZeneca said it has resumed the late-stage trial of its coronavirus vaccine candidate in the UK after the trial was suspended last week following an adverse reaction in a trial participant.

The Australian market is rising amid optimism about progress toward a coronavirus vaccine. Investors also cheered news about the gradual easing of lockdown restrictions in Melbourne as the number of new coronavirus cases continued to fall in the state of Victoria.

The benchmark S&P/ASX 200 Index is adding 25.50 points or 0.44 percent to 5,884.90, after touching a high of 5,903.20 earlier. The broader All Ordinaries Index is advancing 20.80 points or 0.34 percent to 6,059.70. Australian shares closed lower on Friday.

Among the major miners, Rio Tinto is rising more than 3 percent, BHP Group is rising more than 2 percent and Fortescue Metals is adding almost 1 percent.

Gold miners are also higher even as gold prices snapped a third-session winning streak to decline on Friday. Evolution Mining is higher by more than 2 percent and Newcrest Mining is advancing almost 2 percent.

The big four banks - ANZ Banking, Commonwealth Bank, Westpac and National Australia Bank - are rising in a range of 1.0 percent to 1.6 percent.

Macquarie Group said it expects a 35 percent decrease in first-half profit and said it was unable to provide "meaningful" guidance for the full year amid market conditions that are likely to remain challenging. The investment bank's shares are losing more than 4 percent.

In the oil sector, Oil Search and Santos are rising almost 2 percent, while Woodside Petroleum is advancing more than 1 percent after crude oil prices edged up Friday.

In the tech space, Afterpay and Appen are declining more than 2 percent each, while WiseTech Global is down 0.4 percent.

The Japanese market is higher as investor sentiment was boosted by news that AstraZeneca has resumed the late-stage trial of its coronavirus vaccine in the UK.

Investors also watched developments on the political front amid news that Japan's Chief Cabinet Secretary Yoshihide Suga was likely to be elected new president of the Liberal Democratic Party to succeed outgoing Prime Minister Shinzo Abe.

The benchmark Nikkei 225 Index is adding 157.05 points or 0.67 percent to 23,563.54, after touching a high of 23,575.14 earlier. Japanese stocks recovered after a weak start to close higher on Friday.

Market heavyweight SoftBank Group is gaining more than 8 percent, while Fast Retailing is declining more than 1 percent.

SoftBank Group said it has reached an agreement to sell UK chip designer Arm ltd. to U.S. chipmaker Nvidia for up to $40 billion.

The major exporters are higher despite a stronger yen. Canon is rising more than 2 percent, Panasonic is advancing almost 2 percent, Mitsubishi Electric is adding more than 1 percent and Sony is edging up 0.1 percent.

In the tech space, Advantest is unchanged, while Tokyo Electron is down 0.2 percent. In the financial sector, Mitsubishi UFJ Financial is higher by more than 1 percent and Sumitomo Mitsui Financial is adding almost 1 percent.

Among automakers, Toyota is higher by more than 1 percent and Honda Motor is rising 1 percent. In the oil sector, Japan Petroleum is adding 0.2 percent and Inpex is edging up 0.1 percent.

Among the other major gainers, Pacific Metals is gaining almost 6 percent and Hino Motors is rising more than 5 percent. IHI Corp., Isuzu Motors, Toho Zinc and Casio Computer are higher by more than 4 percent each.

Conversely, Kawasaki Kisen Kaisha is losing more than 7 percent, Mitsui OSK Lines is lower by almost 6 percent and Nippon Yusen is declining more than 4 percent.

In economic news, Japan will release final July numbers for industrial production as well as July figures for its tertiary industry index today.

In the currency market, the U.S. dollar is trading in the lower 106 yen-range on Monday.

Elsewhere in Asia, Indonesia is advancing almost 2 percent and South Korea is rising more than 1 percent. Shanghai, New Zealand, Malaysia, Hong Kong and Taiwan are also higher, while Singapore is edging lower.

On Wall Street, stocks closed mixed in choppy trading on Friday as traders seemed reluctant to make significant moves following the substantial volatility seen over the past several sessions. Traders may also have been looking ahead to the Federal Reserve's latest monetary policy decision scheduled for next Wednesday. The Fed is widely expected to leave rates at near-zero levels but could make tweaks to its accompanying statement. The central bank's latest economic projections may also attract some attention.

While the Nasdaq fell 66.05 points or 0.6 percent to 10,853.55, the S&P 500 inched up 1.78 points or 0.1 percent to 3,340.97 and the Dow climbed 131.06 points or 0.5 percent to 27,665.64.

The major European markets turned in a mixed performance on Friday. While the German DAX Index edged down by 0.1 percent, the French CAC 40 Index crept up by 0.2 percent and the U.K.'s FTSE 100 Index rose by 0.5 percent.

Crude oil prices recovered after an early setback on Friday, and despite staying sluggish for much of the day's session, managed to close slightly higher. WTI crude for October ended up $0.03 or about 0.08 percent at $37.33 a barrel.

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