Asian markets jump on vaccine, US aid hopes; gains capped by China data

SYDNEY: Asian markets advanced toward a recent 2-1/2-year peak on Monday powered by hopes of a US fiscal package and expectations of a coronavirus vaccine by the end of this year, though weaker-than-expected Chinese data capped gains.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS climbed 0.6% for its second straight day of gains, paring back slightly following third-quarter gross domestic product data from China.

The index has risen in eight of the last 10 sessions amid a rally in risk assets buoyed by hopes of a coronavirus vaccine and expectations of a so-called “blue wave”, which would see the Democrats claim victory in November’s elections.

Chinese shares started higher though the blue-chip index .CSI300 pared gains after China’s GDP data missed forecasts, though separate monthly indicators pointed to an expansion in economic activity.
China’s gross domestic product (GDP) grew 4.9% in July-September from a year earlier, slower than the median forecast of 5.2%.

Monthly indicators beat forecasts – industrial output accelerated 6.9% in September from a year earlier, when analysts were looking for a 5.8% gain from a 5.6% rise in August. Retail sales edged up 3.3% last month from a year earlier against expectations for 1.8% growth.

“The rebound in Q3 GDP was less strong than expected, but was still a decent 4.9% YoY. September data beat expectations, suggesting a pickup in momentum towards the latter part of Q3,” said Frances Cheung, head of macro strategy for Asia at Westpac in Singapore.

“The pickup in momentum was broad-based, which bodes well for the Q4 outlook.”
Japan’s Nikkei .N225 and Australia’s benchmark index .AXJO were each up 1.1%.

Boosting overall sentiment, drugmaker Pfizer Inc PFE.N said on Friday it could have a coronavirus vaccine ready in the United States by the end of this year.

E-Mini futures for the S&P 500 ESc1 jumped 0.6% in Asian trading after House Speaker Nancy Pelosi said on Sunday she was optimistic legislation on a wide-ranging coronavirus relief package could be pushed through before the election.