Asian shares rise as vaccine hopes inject relief

SHANGHAI: Asian shares rose on Monday, pushing a broad regional index to a record high as investors pinned their hopes for economic revival on coronavirus vaccines, even as the world contends with surging case numbers and delays to fresh U.S. stimulus.

European investors shared the brighter outlook in early trades, with pan-regional Euro Stoxx 50 futures gaining 0.29per cent, German DAX futures 0.26per cent higher and FTSE futures up 0.21per cent.

Investors' fresh optimism 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.

Despite the grim 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.

"With the vaccine on its way and the likelihood that economic damage being done by the virus will lift, we'll still have in place substantial support from central banks and governments. And that is an economic sweet spot that should see a significant economic bounce," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

"It's fascinating that investors are willing to focus on that aspect. It does require some pretty heavy squinting, including looking through the rising infection rates that we're seeing right now. But there is a real optimism around it."

Total U.S. COVID-19 cases topped 12 million over the weekend and more than 255,000 people have died.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.71per cent on Monday, pushing past a previous record high touched on Friday.

Seoul's Kospi was 1.83per cent higher as an optimistic earnings outlook for South Korean chip giants drove gains.

Japanese markets were closed for a holiday, but Nikkei futures added 0.27per cent to 25,815.

The regional index also got a boost from Australian shares which gained 0.34per cent as the country eased some COVID-19 restrictions. Most of the country has seen no new community infections or deaths in several weeks.

Chinese blue-chips added 1.54per cent.

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

U.S. Treasury Secretary Steven Mnuchin said on Thursday 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.

"Discussion 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 were 0.27per cent higher at 3,564 on Monday after U.S. shares slumped on Friday on a combination of dwindling aid for the U.S. economy and rising novel coronavirus infection rates.

The Dow Jones Industrial Average dropped 0.75per cent, the S&P 500 fell 0.68per cent and the Nasdaq Composite ended down 0.42per cent.

In currency markets, a rise in the safe-haven yen underscored nagging investor concerns. The dollar softened 0.12per cent to 103.73 while the euro gained 0.18per cent on the day to US$1.1874.

The dollar index, which tracks the greenback against a basket of six major rivals, nudged down to 92.250.

Commodity markets were more bullish, with traders optimistic about a recovery in crude demand pushing oil higher.

Global benchmark Brent crude rose 0.58per cent to US$45.22 per barrel and U.S. crude bumped 0.28per cent higher to US$42.54 per barrel.

Spot gold added 0.19per cent to US$1,874.06 per ounce.

(Reporting by Andrew Galbraith; Editing by Richard Pullin)