Stocks up on US vaccine hopes this year despite China GDP miss
Global stocks received a boost on Monday from hopes of a coronavirus vaccine breakthrough this year, but weaker-than-expected Chinese GDP data dampened the mood.
Pharmaceutical giant Pfizer announced on Friday it would seek emergency use authorisation from regulators in the US “soon after” the third week of November, assuming positive results from trials.
The news boosted most Asian stocks overnight despite Chinese GDP figures disappointing investors, sending MSCI’s index of Asia-Pacific stocks excluding Japan 0.5% higher, reaching its highest level since May 2018.
Japan’s Nikkei (^N225) rose 1.1%, and the Hong Kong Hang Seng (^HSI) rose 0.6%.
European stocks then joined in the rally on the open, following gains on Friday from a string of strong corporate earnings. The FTSE 100 (^FTSE) rose 0.6%, Germany’s DAX (^GDAXI) rose 0.8%, and France’s CAC 40 (^FCHI) was up 1%.
But the FTSE was trading down 0.3% by the afternoon, amid concerns over tightening coronavirus curbs in the UK including a two-week lockdown in Wales, and the lack of progress in Brexit trade deal talks. The Dax was also down 0.1% by the afternoon, and the CAC up only 0.3%.
Watch: Overseas markets mixed
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US stocks also looked set for gains later in the day. S&P 500 futures (ES=F) and Dow Jones futures (YM=F) were pointing to a 0.9% rise at the open, while Nasdaq futures (NQ=F) were 1.1% higher.
Deutsche Bank analysts said in a note that fresh stimulus hopes were also boosting US stocks.
It comes after president Donald Trump said on Sunday he wanted a "bigger" stimulus package than even House speaker Nancy Pelosi, and suggested he was confident of getting Republicans on board. Pelosi also said she was optimistic a plan could be signed off before the election in November, Bloomberg reports.
But Chinese shares took a hit overnight. Third-quarter GDP data came in below expectations, up 4.9% versus 5.5% growth forecast by analysts. The Shanghai Composite (000001.SS) was down 0.7%.
Chinese data for the month of September alone came in better than expected, however. Retail sales rose 3.3% year-on-year, more than twice the expansion predicted by analysts, while industrial output rose 6.9% versus 5.4% expectations.
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