Asian markets struggled Thursday as a week-long rally sputtered, with sentiment split between vaccine hopes and Joe Biden's election win on one side and fears of a coronavirus surge that threatens any economic recovery on the other.
The mood across trading floors has been joyous for much of the week after the former vice president toppled Donald Trump and US pharma giant Pfizer said its vaccine candidate was 90% effective in trials.
Hopes that a treatment for the killer disease will be rolled out as soon as this year put a rocket under stocks such as airlines that have been battered for most of the year.
And the news continued to improve on the vaccine front as Moderna said it could now start analysis of its own phase three trials. Top US expert Anthony Fauci had earlier said he was optimistic it would be as successful as Pfizer's.
Meanwhile, a Russian candidate was said to be 93% effective and Shanghai Fosun Pharmaceutical said it had received Chinese approval for a trial.
Observers said the availability of more options would make distribution of vaccines a lot easier, meaning normal life could return quicker.
"Once we have made it through what is still bound to be a winter of despair for health care concerns, it could trigger the mother of all economic rebounds boosted by unprecedented policy support," said Axi strategist Stephen Innes, pointing to massive central bank and government stimulus efforts.
But while the upbeat outlook largely remains in place, a worrying spike in new infections in the US and Europe has fanned concerns about a deadly winter in the northern hemisphere with several countries already in lockdown.
Several major economies in Europe have shut down or have imposed strict containment measures, while a number of US cities including New York have been forced to act.
And with infection and death rates continuing to spike, there are concerns the crisis will extend into the new year.
"In the near term, the resurgence of the virus is beginning to make new worries," Torsten Slok, at Apollo Global Management, told Bloomberg TV. "It looks like this will end up being a W-shaped recovery."
On Wall Street, the Dow ended in the red, while the Nasdaq rallied 2% as tech firms, hit by the vaccine news, were boosted by the prospect of more stay-at-home orders.
In Asia, Hong Kong, Shanghai, Sydney, Singapore, Seoul, Mumbai, Taipei, Bangkok and Jakarta were all in the red, though Tokyo ended with gains and Wellington was marginally up.
London tumbled at the open as data showed the British economy expanded 15.5% in the third quarter following a record 19.8% contraction in the previous three months.
Paris and Frankfurt also fell into the red in initial trade.
National Australia Bank's Ray Attrill said: "The near-certainty of a horrible few months ahead for the United States (and Europe) given current infection, hospitalisation and death rates, is dominating sentiment just at the moment."
Investors are keeping tabs on developments in Washington as Trump refuses to concede last week's election and has launched legal challenges, claiming without evidence that there was massive electoral fraud.
His stubbornness has fuelled concerns about the transition to Biden and also led to questions about whether US lawmakers will be able to push through a much-needed economic stimulus.
Oil prices edged up following reports OPEC and other major producers led by Russia are considering a delay to a planned increase in output following months of cuts that were put in place to prevent a market collapse.
The so-called OPEC+ is considering looking at extending the reduction agreement in place for up to another six months when they meet later this month.