Stocks hold near record highs but vaccine concerns cloud outlook

Asian shares stalled near record highs on Friday as investors weighed renewed doubts about a highly-anticipated coronavirus vaccine against hopes that some of the region’s economies will recover quicker than their Western peers.

MSCI’s broadest index of Asia Pacific shares outside Japan dipped 0.04 percent but remained with striking distance of a life-time peak touched this week.

Australian shares ended 0.53 percent down. Treasury Wine Estates Ltd tumbled by 11.25 percent after China slapped tariffs on Australian wine, which is likely to worsen a diplomatic dispute between Beijing and Canberra.

Japan’s Nikkei 225 share index rose 0.33 percent in choppy trade but was set for its best monthly performance in years.Shares in China rose 0.13 percent after data showed Chinese industrial profits surged at the fastest pace since early 2017. South Korean stocks also rose 0.27 percent.

US S&P 500 e-mini stock futures fell 0.09 percent. US financial markets were closed on Thursday for the Thanksgiving holiday and will trade on a partial schedule later on Friday.

Euro Stoxx 50 futures were down 0.26 percent, German DAX futures fell 0.24 percent, and FTSE futures were down 0.22 percent, suggesting a soft start to the European session.

US oil prices extended their declines from a seven-month high due to signs of oversupply.

British drugmaker AstraZeneca’s coronavirus drug was touted as a “vaccine for the world” due to its inexpensive cost, but the efficacy of the vaccine is now facing more intense scrutiny, which experts say could delay its approval.

Several scientists have raised doubts about the robustness of results showing the shot was 90 percent effective in a sub-group of trial participants who, by error initially, received a half dose followed by a full dose.

More work needed

The British company’s chief executive Pascal Soriot was quoted as saying in a Bloomberg News report on Thursday that an additional study would be run to evaluate a lower dosage that performed better than a full amount in AstraZeneca’s studies.

“With global case numbers having now topped 60 million … there is certainly some rough terrain ahead for the global recovery, and that can create economic scarring,” analysts at ANZ Bank wrote in a note.

MSCI’s broadest gauge of world stocks was up 0.08 percent on Friday, sitting just below a record high reached in the previous session.

Concerns about the distribution of a coronavirus vaccine have placed a renewed focus on the current state of the pandemic, which looks grim for many places.

US hospitalisations for COVID-19 are at a record and experts warn that Thanksgiving gatherings could lead to further infections and deaths.

More than 20 million people across England will be forced to live under the country’s toughest restrictions even after a national lockdown ends on December 2.

Growth recovery concerns

Partial lockdowns in some European countries have also raised concern about economic growth.

The European Central Bank’s (ECB) chief economist highlighted these concerns in dovish comments on Thursday, which pushed European bond yields lower, and their prices higher. Bonds tend to rise when investors are concerned about economic prospects.

The euro, which last bought $1.1924, showed little reaction because currency traders have largely priced in expectations for additional ECB monetary easing next month to prop up the region’s economy.

The US dollar index of the greenback against a basket of currencies fell towards its lowest in more than two months.

The yield on benchmark 10-year US Treasury notes fell to 0.8586 percent as some investors sought the safety of holding government debt.

US crude dipped 1.82 percent to $44.88 per barrel. Brent crude fell 0.17 percent to $47.72 per barrel.

Demand for fuel is falling due to renewed coronavirus lockdowns, but some oil producers are not complying with agreed production cuts, which raises concerns about oversupply.

Bitcoin, the world’s biggest cryptocurrency, edged up to $17,256 on Thursday, but it tumbled by 8.4 percent in the previous session after failing to break through its record high of $19,666.

The cryptocurrency showed little reaction to a report in the Financial Times that Facebook will launch its own Libra digital currency in limited format next year.

Bitcoin has rallied about 140 percent this year, fuelled by demand for risky assets.

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