Asia had a choppy session after more barbs between Beijing and Washington over Hong Kong, but 1.7%-2.2% gains for London .FTSE, Frankfurt .GDAXI, Paris .FCHE and a 1% rise in Wall Street futures blew away any caution.
An experimental vaccine for COVID-19 produced by U.S. company Moderna (MRNA.O) drew safe immune responses in all 45 healthy volunteers, an early stage trial showed on Tuesday. There were reports on Wednesday that a separate University of Oxford trial was also looking good.
Uncertainty remained over how quickly an effective and rapidly available vaccine can be found, said David Miller, investment director at Quilter Cheviot Investment Management, but there was a supportive backdrop for markets.
“This is all against the background of very low interest rates,” he said. “What really matters, though, is consumer confidence. I think we are all going to remain fairly wary.”
Hopes of progress this week towards a deal on the European Union’s 750 billion-euro COVID recovery fund were also helping Europe’s mood. The euro was above $1.1430 for the first time since March and Italy and Spain’s bond market borrowing costs came down again.
Overnight had been more mixed. Chinese shares fell 1.3% .CSI300 and Hong Kong .HSI ended flat, after U.S. President Donald Trump ordered an end to Hong Kong's special status under U.S. law to punish China for its "oppressive actions" against the former British colony.
That prompted a retaliatory warning from China's foreign ministry that "Hong Kong affairs are purely China's internal affairs and no foreign country has the right to interfere". Japan's Nikkei .N225 and Australia's benchmark index remained upbeat, though, finishing up 1.6% and 1.9%, respectively.
S&P 500 futures were up 1% too, with shares in Moderna - which has never had a licensed product - up nearly 14% in premarket trading, and the main U.S. airlines and cruise ship operators rose 6%-7% on the vaccine hopes.
Investment bank Goldman Sachs (GS.N) was also pointing higher after reporting higher quarterly profits following the COVID crisis trading boom. JPMorgan, Citi and Wells Fargo had reported huge Q2 profit drops on Tuesday and set aside a collective $28 billion for loan losses.
More about:
