GLOBAL MARKETS-Asian markets, risk assets ride up on vaccine hopes

By Swati Pandey
SYDNEY, July 15 (Reuters) - Asian shares jumped on Wednesday
as optimism about a coronavirus vaccine bolstered risk appetite
while the euro rose to a four-month top on the prospect of
stimulus ahead of a crucial EU summit.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 1.2%, edging closer to a recent five-month
peak.
Japan's Nikkei .N225 added 1.5% to the highest since June
10 while Australia's benchmark index was up 1%. Chinese shares
gained modestly with the blue-chip CSI300 index .CSI300
ticking up 0.3%.
E-mini futures for the S&P 500 EScv1 rose 0.8%.
Risk appetite was boosted by Moderna Inc's MRNA.O
experimental vaccine for COVID-19 which showed it was safe and
provoked immune responses in all 45 healthy volunteers in an
ongoing early-stage study. On Tuesday, the Dow Jones Industrial Average .DJI rose
over 2%, while the S&P 500 .SPX gained 1.34% and the Nasdaq
Composite .IXIC climbed 0.94%. .N
"... the vaccine is more than a show stopper. It's the
ultimate recession stopper," said Stephen Innes, markets
strategist at AxiCorp.
The stock surge came despite lingering bad news about the
coronavirus and after three U.S. states reported new record
daily deaths from the pandemic, while tensions continued to grow
between the United States and China.
"Although a mismatch between financial markets and the real
economy remains in full effect, the removal of a single
recessionary input (the virus) via a vaccine can pave the way
for fast economic recovery," Innes added.
"So, the positive news on the vaccine can go a long way to
explain the dissonance between the shift in the stock market
sentiment relative to the angst on Main Street."
Simmering tensions between the United States and China also
loom large, after U.S. President Donald Trump signed legislation
and an executive order to hold China "accountable" for the
national security law it imposed on Hong Kong.
The dollar was on the defensive, particularly against
risk-sensitive currencies, following news of progress in vaccine
development.
The euro EUR=EBS rose to as high as $1.1423, its strongest
since March 10 and not far off its peak so far this year of
$1.1495.
The single currency has been helped by hopes the European
Union could agree at its summit later this week on a rescue
financing package that will limit the economic damage to the
bloc from the coronavirus pandemic.
The euro's strength helped to push the dollar index =USD
to 96.056, a one-month low.
The yen was little moved at 107.27 per dollar JPY= , off a
two-week high of 106.635 ahead of the Bank of Japan's policy
announcement later in the day where it is expected to keep
monetary policy steady.
The risk-sensitive Australian dollar rose 0.5% to $0.7009
AUD=D4 .
There were still signs of wariness among investors, as
yields on leading U.S. and euro zone government debt fell and
safe-haven gold prices solidified gains above $1,800 an ounce.
Spot gold XAU= rose to $1,809 an ounce.
Oil prices rose on Wednesday after a sharp drop in U.S.
crude inventories. Brent crude LCOc1 futures were up 10 cents
at $43 a barrel, and U.S. crude CLc1 futures rose 14 cents to
$40.43 a barrel. O/R

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