HONG KONG (Reuters) – Asian share markets mostly rose on Tuesday as global investors applauded successful trial data for a coronavirus vaccine, although expected delays to any mass roll-out took the gloss off early gains.

FILE PHOTO: A worker in protective suit takes body temperature measurement of a woman inside the Shanghai Stock Exchange building, as the country is hit by a novel coronavirus outbreak, at the Pudong financial district in Shanghai, China February 28, 2020. REUTERS/Aly Song

European futures trading during the Asian session were indicating a weaker open of at least 1.2%, while U.S. futures showed a potential fall of at least 0.5% after Monday’s steep market gains.

The positive tone in Asian equities came after Pfizer Inc PFE.N said its COVID-19 vaccine, developed with German partner BioNTech SE BNTX.O, was more than 90% effective in preventing infection, marking the first successful results from a large-scale clinical trial.

Major Asian markets soared on the vaccine news before weakening later in the session.

Japan’s Nikkei 225 .N225 ended up nearly 0.3% after being 1.1% higher in early trading, touching a 29-year high.

Australia’s S&P/ASX 200 .AXJO closed 0.66% higher after trading up as much as 1.6%, while Hong Kong’s Hang Seng index .HSI was at 0.77% in the afternoon after rising 1% in early trade.

Singapore’s Straits Times .STI gained 2.94% to take the index to its highest point since June.

Despite the optimistic tone across the region, there was some weakness in China, with the CSI300 Index .CSI300 slipping 0.17%.

Analysts attributed the decline to the heavy exposure of China’s indices to tech stocks, which came under pressure as investors eyed less consumer reliance on technology if a vaccine leads to an easing of movement restrictions.

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MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was 0.1% higher.

“The market is looking forward to a more sustained solution to the pandemic and that is why we have seen such a sharp reaction,” said Tai Hui, chief Asia market strategist at JPMorgan Asset Management

However, he sounded caution over the speed in which the vaccine could be implemented.

“Given more tests are needed, then the approval process. Manufacturing and distribution would mean the vaccine, if truly effective, is still months away from mass deployment,”

The equities optimism was not shared across all asset classes. Oil prices slipped in Asian trade after posting the biggest one-day percentage gain in five months.

The overnight rise prompted some traders to take profits, analysts said.

Brazil’s health regulator said on Monday it had suspended clinical trials for China’s Sinovac coronavirus vaccine after adverse effects had emerged.

STOCKS ROTATION

Airline, travel and tourism stocks across Asia were beneficiaries of the positive sentiment from the vaccine announcement and held their gains while the broader indices weakened in the afternoon.

“No surprises but it’s essentially a rotation … what was bought in the last eight months is now being sold and what was sold is being bought,” Citigroup global markets director Elizabeth Tian said.

Qantas Airways QAN.AX closed 8.3% higher to hit its highest level since March, Japan Airlines 9201.T shot 20.6% higher and ANA Holdings 9202.T rose 17.5%.

In Hong Kong, Cathay Pacific Airways 0293.HK shares jumped 13%, the best since July.

“Markets will get ahead of themselves in the short term with the vaccine news but longer term it feels like it is going higher,” Ord Minnett advisor John Milroy said from Sydney.

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Early Tuesday, Japan’s Prime Minister Yoshihide Suga instructed his cabinet to design a fresh stimulus package to help revive the nation’s flagging economy to offset the ongoing effects of coronavirus.

On Wall Street, the Dow Jones Industrial Average .DJI rose 2.95%, the S&P 500 .SPX gained 1.17% while the Nasdaq Composite .IXIC dropped 1.53%. E-mini futures for the S&P 500 rose 0.47%.

While stocks have also rallied on the assumption that Democrat Joe Biden would be the next U.S. President, the top Republican in U.S. Congress on Monday did not acknowledge Biden as president-elect, raising concerns about a rough transition of

The Australian dollar fell 0.08% versus the greenback at $0.7279.

The yen strengthened 0.38% to 104.96 per dollar, while sterling was last trading at $1.3182, up 0.14% on the day.

The vaccine news also sent long-dated U.S. Treasury yields sky-rocketing in their biggest one-day jump since March. The yield curve, an indication of risk appetite, hit its steepest level since March.

Bonds had their biggest selloff since recoiling from March peaks. The yield on benchmark 10-year U.S. government debt, which rises when prices fall, jumped 10.3 basis points on Monday and held above 0.9% on Tuesday at 0.9099%

The CBOE Market Volatility index .VIX, a barometer of investor anxiety, hit its lowest closing level since late August.

Oil prices lost momentum in Asian trade. Light crude oil fell by 1.49% to $39.74 a barrel while Brent crude slipped 1.06%.

Spot gold added 1% to $1,880.26 an ounce.

Via Reuters Finance