Global stocks rallied after Donald Trump said his administration would co-operate with president-elect Joe Biden’s transition team and another Covid-19 vaccine delivered positive results.

Japan’s benchmark Topix index rose as much as 2.2 per cent early on Tuesday, hitting its highest level in two years, after traders returned from a long weekend. Australia’s S&P/ASX 200 climbed 1.1 per cent and South Korea’s Kospi added 0.8 per cent.

Futures markets pointed to gains for US stocks when trading begins on Wall Street later in the day, with the S&P 500 tipped to climb 0.5 per cent.

The gains for Asia-Pacific equities and futures came after Mr Trump announced he had recommended the General Services Administration, which provides transition resources for new presidential administrations, to “do what needs to be done with regard to initial protocols”. He added this was “in the best interest of our country”.

The move, while short of a full concession 20 days after the November 3 election, marked the first break in an unprecedented effort by the White House to overturn the results. It could remove a lingering source of uncertainty for investors about the smooth transition of power to the president-elect’s administration.

Markets have also recently been unsettled by the US Treasury’s refusal to extend emergency lending facilities, stoking concerns the president was seeking to constrain the incoming administration’s ability to tackle the pandemic’s economic fallout.

“If they were unable to transition through the end of this year then the policy vacuum we would’ve entered into could’ve been all the more damaging to the US economy,” said Robert Rennie, global head of market strategy for Westpac.

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Mr Rennie added that Asian stocks were also being boosted by AstraZeneca and Oxford university’s announcement that the coronavirus vaccine they are jointly developing was up to 90 per cent effective, depending on dosage. That is “terrific news for all those emerging economies [in Asia] that have been so horribly hit”, he added.

In China, makers of personal protective equipment listed in Shanghai and Shenzhen fell following news of the AstraZeneca and Oxford university vaccine. China accounts for an estimated 44 per cent of global PPE shipments.

China’s CSI 300 benchmark of large onshore equities fell 0.6 per cent on Tuesday, with healthcare stocks down 1 per cent. Hong Kong’s Hang Seng index was little changed, although its healthcare names fell 3.5 per cent.

Brent crude, the international oil benchmark, rose almost 1 per cent to $46.47 a barrel.

Gold, which often serves as a haven in times of investor uncertainty, fell 0.5 per cent to $1,826.72 per troy ounce.

Via Financial Times

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