TOKYO – (AP) – Asian stocks gained on Tuesday, boosted by a near-record rise on Wall Street, although momentum began to falter amid concerns over the economic fallout from the surge in coronavirus infections in the region.
Japan’s Nikkei 225 benchmark rose 0.9% to close at 27,732.10. South Korea’s Kospi gained 1.6% to 3,139.86. The Australian S & P / ASX 200 rose 0.2% to 7,503.00. The Hong Kong Hang Seng rose 1.8% to 25,559.67, while the Shanghai Composite rose 1.1% to 3,513.52.
Some parts of Asia have experienced slower vaccine deployments than in the United States and Europe and are at higher risk for the more contagious delta variant.
“The outbreaks in Asia-Pacific have led to further containment measures, disrupting production and trade in a region that accounts for 37% of global merchandise exports,” said Sara Johnson, executive director, global economy, IHS Markit. “Asia-Pacific manufacturing hubs are the current hot spots for COVID-19. “
She noted that vaccination campaigns outside mainland China have been slow in Asia, hurting consumer spending, tourism, industrial production and exports. IHS Markit’s July manufacturing PMI surveys show deteriorating economic conditions in Indonesia, Malaysia, Myanmar, Thailand and Vietnam. Cases of COVID-19 infections have declined in India, Taiwan and Indonesia, but have increased in Japan, South Korea, Malaysia, the Philippines and Vietnam.
“Sentiments of risk largely followed the positive lead of the US indices overnight. Some catch-up growth may be on the watch, as Asian markets have been performing divergent from their Western counterparts since June. Covid-19 risks continue to be prevalent, ”said Yeap Jun Rong, market strategist at IG in Singapore.
On Wall Street Monday, the S&P 500 rose 0.9%, driven by technology, communications and financial stocks, after spending much of the day at a striking distance from its own record. The benchmark index finished less than 0.2% below its all-time high set a week ago.
Pfizer rose 2.5% after the Food & Drug Administration fully approved its COVID-19 vaccine. The vaccine had been under emergency use authorization since December, but full approval could convince some reluctant Americans to get the vaccine now and will likely give local authorities the legal backing to impose warrants.
BioNTech, a German drug maker that developed the vaccine with Pfizer, jumped 9.6% on the news. Moderna, which developed a similar vaccine using the same technology, climbed 7.5%.
The prospects of an increase in vaccinations and signs of some slowing in the rate of growth of coronavirus cases have helped put investors in a buying mood, said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.
Hopefully FDA approval “increases vaccine uptake,” Samana said. Market gains “shouldn’t be seen as more than a vaccine rally.”
The S&P 500 gained 37.86 points to 4,479.53. The Dow Jones Industrial Average added 215.63 points, or 0.6%, to 35,335.71. The Nasdaq gained 227.99 points, or 1.5%, to 14,942.65, eclipsing its latest all-time high set earlier in the month.
Small business stocks have overtaken the broader market. The Russell 2000 Index gained 40.70 points, or 1.9%, to 14,942.65.
The market remains in a summer slowdown, with the end of August historically being one of the slowest times for trading, with the exception of the Christmas holiday period. Markets are expected to increase in volume and volatility after Labor Day weekend.
Investors will look to the Federal Reserve as the Kansas City Fed’s annual conference in Jackson Hole, Wyoming begins later this week. This will likely give Wall Street a better look at what the Fed can do about inflation.
In energy trading, benchmark US crude rose 41 cents to $ 66.05 a barrel. Brent crude, the international standard, added 48 cents to $ 69.23 a barrel.
In currency trading, the US dollar edged up to 109.81 Japanese yen from 109.69 yen. The euro cost $ 1.1744, compared to $ 1.1743.
AP Business Writer Alex Veiga contributed.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
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