Asia trades higher with investor sentiment supported by positive vaccine news

21/07/2020

We should start the day on yet another positive note as US markets trade at the highest levels since February, the JSE ALSH closed up 0.63% and will buoyed today with Tencent trading up 6.03% in Hong Kong. Miners drove the market yesterday with Gold trading at nine year highs, Gold is at $ 1818 an ounce , in ZAR terms R 30196.80 an ounce, so September 2011 highs of $ 1920.30 the ZAR price was only R 14400, just some food for thought.

The Gold Index was up 4.12%, Plats up 2.83% and Resi up 1.51%. IG futures are up 425 points.

On the vaccine front, Pfizer and BioNTech reported early positive data on a joint coronavirus vaccine candidate. Another candidate from Oxford University and AstraZeneca also showed a positive immune response in an early trial

Shareholders of City Lodge Hotels vote on a plan to raise 1.2 billion rand ($72 million) by selling shares to existing investors. Oasis Group Holdings earlier this month said the rights offering could hurt shareholders.

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ECONOMIC DATA:

9am: May Leading Indicator, prior 97.2

Overnight in the US we saw technology shares push the Nasdaq up 2.5%. Amazon led the gains in popular tech names up 7.9%, its best day since December 2018. IBM gained 4.7% in extended trading after the company reported better-than-expected second-quarter earnings. Notably, IBM improved gross margins in three of its five units in the past quarter. The Dow was only up 9 points and the S&P up 27 points, with those overnight gains on Wall Street, the S&P 500 turned green for 2020 with a 0.6% gain on the year, while the Nasdaq has risen 20% this year. The 30-stock Dow lagged, however, down 6.5% for 2020. US futures are slightly higher this morning.

European stocks closed higher as investors reacted to positive results from another coronavirus vaccine candidate. The pan-European Stoxx 600 recouped earlier losses to close over 0.7%. Britain’s FTSE 100 was the only major index firmly in the red, with tensions between the U.K. and China weighing on sentiment. U.K. Foreign Secretary Dominic Raab announced the suspension of the country’s Hong Kong extradition treaty on Monday, in response to Beijing’s new national security law in the former British colony. FTSE – 0.46% CAC + 0.47%,DAX + 0.99%.

Asia trades mostly higher supported by a slew of positive news on the coronavirus vaccine front. The Nikkei 225 gained 0.61%, South Korea’s Kospi index was up 1.34% while in Australia, the benchmark ASX 200 added 1.49%with financials subindex up 1.41% and the Aussie Miners up 1.51%. the Hang Seng is up 1.88% with Tencent playing catch up to US tech names, up 6.03%.

Oil prices are a touch higher, Brent $ 43.33, WTI $ 40.84.

Gold prices jumped to their highest level since September 2011, and silver has hit a near four-year peak as a spike in COVID-19 infections and hopes for increased stimulus measures supported safe-haven demand. Gold is trading well below its all-time peak of $1,920.30 an ounce hit in September 2011, with prices mainly boosted by a wave of monetary stimulus measures to shelter the impact of the pandemic. Silver rose 2.4% to $19.76 per ounce, having hit a peak since September 2016 at $19.81 on increasing safe-haven flows. Palladium gained 2% to $2,061.42 per ounce, while platinum rose 0.7% to $843.52 per ounce.

Below, ZAR since Sept 2011 vs Gold Index highs of 2011.

Have a great day and keep safe.

Regards.