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GLOBAL MARKETS-Vaccine progress lift stocks, dollar still sickly

Published 2020-11-23, 04:53 a/m
© Reuters.
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* AstraZeneca vaccine returns stocks to February levels

* Australia eases lockdowns, U.S. vaccines in sight

* 2020 asset performance http://tmsnrt.rs/2yaDPgn

* World FX rates in 2020 http://tmsnrt.rs/2egbfVh

*

By Lawrence White and Andrew Galbraith

LONDON/SHANGHAI, Nov 23 (Reuters) - Shares and oil prices rose on Monday while the dollar fell as investors pinned hopes for economic revival on coronavirus vaccines, even as the world contended with surging case numbers and delays to fresh U.S. stimulus.

The STOXX index of Europe's 600 largest shares .STOXX rose 0.5% to its highest since February after AstraZeneca AZN.L become the latest major drugmaker to say its vaccine for the virus could be around 90% effective. crude futures LCOc1 rose nearly 2% as traders eyed a recovery in crude demand due to the successful vaccine trials, while the euro edged up to 1.1864 EUR= as the dollar tested the bottom of a range it has been in for the last few months. /FRX

The vaccine developed by AstraZeneca and Oxford University is the third major trial to report success after U.S.-based Moderna Inc MRNA.O and Pfizer Inc (NYSE:PFE) PFE.N with Germany's BioNTech SE 22UAy.F BNTX.O , sending pandemic-weary investors to take on risk in hopes of a swift economic recovery.

Their optimism also comes after a top official of the U.S. government's vaccine development effort said Sunday that the first vaccines could be given to U.S. healthcare workers and others recommended by mid-December. the backdrop of accelerating COVID-19 infections in the United States, the forecast helped to raise hopes that lockdowns that have paralysed the global economy could be nearing an end.

"Today's vaccine news is positive, but it is only partly responsible for the rally in stock markets this morning, which is also being driven by the news that the U.S. hopes to start the vaccination program in under three weeks," said Philip Shaw, chief economist at Investec in London.

The rally showed investors are willing to look past the grim U.S. case numbers -- cases topped 12 million over the weekend -- and weak European economic data released on Monday.

IHS Markit's flash composite Purchasing Managers' Index, which tracks the manufacturing and services sectors that together account for more than two-thirds of the German economy, edged down to 52.0 from 55.0.

The European share rally took the region's November gains to 15% and followed another record high for Asian equities even before the announcement of latest vaccine news.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS looked set to end the day 0.8% higher.

Australian shares .AXJO gained 0.3% as the country eased some COVID-19 restrictions. Most of the country has seen no new community infections or deaths in several weeks. bluechips had finished 1% higher, Seoul's KOPSI climbed 1.9% .KS11 and Bangkok jumped 2.2% .SETI to hit a five-month high.

GOLD LOSING ITS SHINE

Analysts said the gains belied some uncertainty as monetary and fiscal help for the U.S. economy remained elusive.

U.S. Treasury Secretary Steven Mnuchin said last week that key pandemic lending programs at the Federal Reserve would expire on Dec. 31, putting the outgoing Trump administration at odds with the central bank and potentially adding stress to the economy. is only beginning and may take some time if the recent partisan disagreements over the composition and magnitude of fiscal spending are any indication," analysts at ANZ said in a note.

U.S. e-mini futures for the S&P 500 EScv1 were 0.7% higher at 3,577 in Europe. Wall Street's main markets had dropped 0.4% to 0.8% on Friday on the combination of aid doubts and the country's surging coronavirus infection rates.

With the vaccine news and dollar index =USD , which tracks the dollar against a basket of six major rivals, down to 92.264, commodity markets were still bullish, with traders optimistic about a recovery in crude demand pushing oil higher.

Brent crude futures LCOc1 rose 63 cents, or 1.4%, to $45.59 a barrel in London. West Texas Intermediate crude CLc1 gained 49 cents, or 1.2%, to $42.91 a barrel. Both benchmarks jumped 5% last week.

Safe-haven gold XAU= , meanwhile, drifted at $1,872 per ounce, having lost almost 10% since peaking in earlier August. GOL/

"Positive sentiment continues to be driven by the recent good news about the efficacy of coronavirus vaccines in development and the expectation that the OPEC+ meeting at the end of this month could see the group extend current cuts by three to six 6 months," said Stephen Innes, chief global markets Strategist at Axi, a financial services firm.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates in 2020

http://tmsnrt.rs/2egbfVh 2020 asset performance

http://tmsnrt.rs/2yaDPgn

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