Asian stocks mainly up over vaccine hopes, but risks remain

Asian stocks were mostly up on Wednesday, with investors cheered by positive data for a potential COVID-19 vaccine.

U.S. biotech firm Moderna Inc (NASDAQ:MRNA)'s experimental COVID-19 vaccine was declared safe and generated “robust” immune responses in all 45 volunteers taking part in the study, according to early-stage human trial results published in the New England Journal of Medicine on Tuesday.

The data boosted hopes of a cure for the virus, but some investors warned that the ever-rising number of cases and re-imposition of lockdowns remain risks.

"Markets have shown a remarkable ability to look through rising infection rates and rising risks of lockdowns," Michael McCarthy, chief markets strategist at CMC Markets, told Reuters.

"At the moment, the market seems to be quite lively and happy to rally on despite those increasing economic risks."

There are over 13.2 million cases globally as of July 15, according to Johns Hopkins University data.

Hong Kong’s Hang Seng Index was up 0.05% by 10:42 PM ET (3:42 AM GMT). Meanwhile, tensions between the U.S. and China continue to simmer after U.S. President Donald Trump issued the order to end Hong Kong’s preferential trade status on Tuesday. Trump also gave the green light to legislation sanctioning Chinese entities involved with enacting the city’s national security laws.

China’s Shanghai Composite slid 1.29%, and the Shenzhen Component was down 0.18% after reversing earlier gains.

Japan’s Nikkei 225 rose 1.27%. The Bank of Japan will release its policy statement, widely expected to remain unchanged, later in the day.

Tokyo also continues to deal with a fresh outbreak of COVID-19 cases in the city, with the alert level raised to the highest of four levels earlier in the day. The number of daily cases exceeded 200 for four of the past six days, with a record 243 cases reported on Friday.

South Korea’s KOSPI gained 0.62% and the ASX 200 rose 1.18%.

Some investors remained optimistic about equity’s latest rally.

Julius Baer Asia chief investment officer Bhaskar Laxminarayan told CNBC, Asia’s markets are “taking the cues from the global environment. Equities in general ... is the only game in town. Chances of making any kind of return on a risk-adjusted basis really rests on the shoulders of equities now.”