Hong Kong Market jumps on hope for Moderna's coronavirus vaccine

The Hong Kong stock market finished session sharp higher on Tuesday, 19 May 2020, as risk appetite buying underpinned on following an enthusiastic night on Wall Street, after a U.S. biotech firm said that results from its first human trial of a vaccine candidate against the new coronavirus had been "positive". Meanwhile, hopes of gradual re-opening of some economies also boosted sentiment.

At closing bell, the benchmark Hang Seng Index advanced 1.9%, or 453.36 points, to 24,388.13. The Hang Seng China Enterprises Index spurted 1.61%, or 156.94 points, to 9,883.37.

The gains in Hong Kong were mostly across the board, with banks and property developers the day's big winners. Out of the 50 index constituents, 48 rose.

Investors appetite for risk assets underpinned on tracking gains on the Wall Street overnight on news on the first clinical tests of a coronavirus vaccine. Drug company Massachusetts-based Moderna announced encouraging results in very early testing of an experimental coronavirus vaccine. Adding to an upbeat mood was the firm saying in a press release that provisional clinical data showed that the vaccine created coronavirus antibodies in some of those who took part in the trial and added that it was "generally safe". A Phase 3 trial, the largest and most important to validate the efficacy of a vaccine, should begin in July.

The World Health Organization has said there are more than 100 candidate vaccines worldwide in various stages of developmental process and trials aimed at combating the virus.

Investors have kept a close eye on vaccine programs of several drugmakers, cheering any positive development amid fears of a second wave of infections as governments start easing restrictions. Investors are hoping that a working vaccine for COVID-19 can be developed and that it will help reassure people and businesses as the economy reopens.

News of favourable results about a potential vaccine, coupled with the easing of lockdown measures across the globe, supported risk sentiments.

Tech stocks were in focus after the compiler of Hang Seng Index decided to proceed with its biggest revamp to the benchmark gauge in 14 years. The inclusion of the new economy stocks in the benchmark will come as early as August. Alibaba, which reports its earnings on Friday, gained 3.4%. Meituan Dianping, which gained 3.2%, rose to an all-time high, while Xiaomi gained 5.2%. The chances of these three companies being included in the index during the next rejig are high. Index heavyweight Tencent added 1.7%.

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