Asian stocks opened firmer on Tuesday after the S&P 500 and Dow Jones indexes hit record highs on news of another promising coronavirus vaccine, which supported hopes of a quicker economic recovery.
Investor sentiment shot up after Moderna Inc said its experimental COVID-19 vaccine was 94.5% effective in preventing infection based on interim late-state data.
The Cambridge, Massachusetts-based firm became the second drugmaker, after Pfizer Inc , to announce promising trial data in the development of a vaccine to defeat the pandemic. Its shares gained 9.6% on the day.
"This is a continuation of what we saw last week as the vaccine being a catalyst for a rotation into cyclical sectors such as energy, financials, and defense with expectations for renewed demand and travel," said Thomas Hayes, managing member at Great Hill Capital in New York.
Australia's S&P/ASX 200 rose 0.6% in early trading, while Hong Kong's Hang Seng index futures gained 0.27%. Japan's Nikkei 225 climbed 0.5%.
All three main Wall Street indexes advanced on Monday, with the Dow Jones Industrials Average setting a record as it neared the 30,000 mark for the first time in nine months. The benchmark Dow is the last of the three to reclaim levels reached in February, before lockdowns sent the markets into free-fall. The S&P 500 surpassed its own record set on Friday.
Cyclical and small cap names, which generally benefit the soonest as an economy recovers from a recession, led the way, with energy , industrials and financials the top-performing sectors.
Travel-related stocks, which have been clobbered by coronavirus lockdowns, were also in demand. Shares of United Airlines Holdings Inc , American Airlines Group Inc , Carnival Corp and Norwegian Cruise Line Holdings Ltd jumped between 4.5% and 9.7%.
"The light switch has really be turned on and this is the real deal unlike some months back," Hayes said.
On Wall Street, the Dow Jones Industrial Average rose 1.6%, the S&P 500 gained 1.16%, and the Nasdaq Composite added 0.8%.
Oil prices rose on the prospects of an end of pandemic restrictions that have hit demand. Prices were also buoyed by data showing a rebound in China and Japan, with figures showing Chinese refineries processed record daily levels of crude in October.
U.S. crude settled up 3.02% at $41.34 per barrel and Brent was at $43.82, up 2.43% on the day.
U.S. Treasury yields rose on Monday and the yield curve steepened in the wake of the vaccine developments. Benchmark 10-year notes last fell 5/32 in price to yield 0.9094%, from 0.893% late on Friday.
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