You are here: Home » News-CM » International » Market Report
Business Standard

China Stocks gain on hopes for coronavirus vaccine, stimulus hopes

Health Medical Pharma

Capital Market 

The Mainland China share market finished session higher on Tuesday, 19 May 2020, as the market inherited a positive lead from U. S. shares advancing overnight 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". However, market gains were capped on worries over deepening Sino-U. S. trade tensions after Washington moved to cut Huawei Technologies off from global chip suppliers. At closing bell, the benchmark Shanghai Composite Index was up 0.81%, or 23.16 points, to 2,898.58. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 1.26 %, or 22.73 points, to 1,823.57. The blue-chip CSI300 index rose 0.85%, or 33.34 points, to 3,956.25.

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.

The annual gathering of parliament, the National People's Congress (NPC), starts on May 22, where the government will announce new plans and set key economic targets. Chinese financial markets usually trade in narrow ranges during key political and economic events.

China's plans to step up stimulus support for the virus-ravaged economy have promoted heated debate among economists and advisers over whether the central bank should buy government bonds, as other major economies have done known via a policy known as quantitative easing, to fund the country's fiscal deficit.

China's Ministry of Transport said on Tuesday that it would introduce policies to speed up the development of the autonomous driving technology. On Monday, the Shanghai government unveiled a three-year plan to upgrade industrial production with new technology and big data.

Electronic equipment manufacturer Fujian Start Group and WenYi Trinity Technology, which makes and sells moulds and equipment, surged by the daily cap of 10%. Semiconductor stocks also extended gains, with Jiangsu Yoke Technology and Unigroup Guoxin Microelectronics soaring by 10%.

CURRENCY NEWS: China's yuan was up against the dollar on Tuesday, inline with firmer mid-point fixing by central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.0912 per dollar, 118 pips or 0.17% firmer than the previous fix of 7.103.

Powered by Capital Market - Live News

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, May 19 2020. 18:09 IST