Hong Kong stocks advanced after US drug maker Pfizer said large-scale trials of its coronavirus vaccine showed it was more than 90 per cent effective in preventing infection. Chinese internet-related stocks crashed on concerns about antitrust regulations.
The Hang Seng Index rose 1.1 per cent to 26,301.48, the highest level since July 6. The Shanghai Composite Index slipped 0.4 per cent from a two-month high after a government report showed consumer prices grew in October at the slowest pace in 11 years.
Pfizer and its German partner BioNTech SE are the first drug makers to release successful data from a large-scale clinical trial of a coronavirus vaccine. They said tests so far have found no serious safety concerns, and expected to seek authorisation for emergency use in the US later this month.
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Fosun Pharmaceutical, which co-developed the vaccine, rallied 14.2 per cent. The Chinese firm agreed in March to pay up to US$135 million for the exclusive right to commercialise it in mainland China, Taiwan, Hong Kong and Macau.
“Investors have been patiently waiting for the news of any vaccine development breakthrough and last night this patience paid off,” said Tai Hui, chief market strategist for Asia at JP Morgan Asset Management. While it may be months away from mass deployment, “this offers a ray of hope that the market did not hesitate to take advantage of.”
Overnight, the Dow Jones Industrial Average rose 2.95 per cent in its biggest one-day percentage gain since June 5 following the US presidential election outcome, while the S&P 500 rose 1.17 per cent. Tech-heavy Nasdaq fell by 1.5 per cent, hurting pandemic winners like Zoom, Netflix and Alibaba Group Holding.
While markets in the Asia-Pacific also rallied, they have since pared some of the early gains. Japan’s Nikkei 225 added 0.3 per cent, surging to the highest level since 1991. Australia’s S&P/ASX 200 added 0.7 per cent to the highest level since early March. South Korea’s Kospi edged up 0.3 per cent to its highest level since June 2018.
Gains were tempered by news that the final stage of another vaccine candidate administered by Sinovac Biotech was stopped in Brazil after encountering adverse consequences. Chinese internet giants crashed after China unveiled further details to its anti-monopoly law to rein in poor market practices.
The Hang Seng Tech Index of 30 top technology stocks fell 5.2 per cent. Chinese food delivery giant Meituan plunged 10.5 per cent, while online shopping giant JD dropped 8.8 per cent. Tencent fell 4.4 per cent, while Alibaba, the owner of this newspaper, declined 5.1 per cent.
Travel-related stocks also gained, with Cathay Pacific soaring 14.1 per cent and Air China rocketing 13.7 per cent. In mainland China, airport-related stocks gained 4.3 per cent, according to a gauge compiled by Xuangubao.cn. Airport operators Guangzhou Baiyun International Airport gained 6.1 per cent, while Shanghai International Airport rose 5.8 per cent.
Some laggard sectors also gained. Wharf REIC soared 13.9 per cent, while CK Asset rose 7.1 per cent, and Sun Hung Kai Properties increased 4.8 per cent.
“We believe the good overall market sentiment would also be constructive to the property sector, and investors may chase the sector as a laggard in deep value given its trough valuation,” Jefferies analysts led by Stephen Cheung said in a note on Tuesday.
Chinese paper product manufacturer Quzhou Wuzhou Special Paper gained 44 per cent to 14.53 yuan from its initial public offering price of 10.09 in Shanghai in the only stock debut today.
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