Vaccine hopes boost global share markets

World stocks rallied on Monday on hopes for a coronavirus vaccine after AstraZeneca resumed its phase-3 trial, but caution lingered before a host of central bank meetings this week.

Sterling, which has been hit by renewed Brexit turmoil, was on firmer ground before a vote on British Prime Minister Boris Johnson’s plan to break international law by breaching parts of the Brexit divorce treaty with the European Union.

European stock markets opened broadly higher and U.S. stock futures rallied more than 1% — suggesting a strong start for Wall Street later on.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9% to its highest in almost a week. Japan’s Nikkei firmed 0.7% after Chief Cabinet Secretary Yoshihide Suga won a landslide victory in a ruling party leadership election, paving the way for him to succeed Prime Minister Shinzo Abe.

Drugmaker AstraZeneca said at the weekend it has resumed British clinical trials of its COVID-19 vaccine, one of the most advanced in development, after getting the green light from safety watchdogs.

The news provided a boost to sentiment in world share markets, hit last week by a selloff in U.S. tech stocks.

“The news over the weekend that AstraZeneca clinical trials had resumed is likely to be well-received, however it is unlikely to assuage concerns that the speed with which these trials are being done could result in a vaccine being rushed out too hastily, with unforeseen circumstances,” said Michael Hewson, chief market analyst at CMC Markets UK.

U.S. chipmaker Nvidia Corp said it would buy UK-based chip designer Arm from Japan’s SoftBank Group for as much as $40 billion in a deal set to reshape the global semiconductor landscape, spurring a 1% gain in Europe’s tech sector.

Friday marked six months since the World Health Organization (WHO) declared the coronavirus a pandemic on March 11.

Since then, major global economies have slipped into recession and millions have lost their jobs, prompting central banks around the world to launch unprecedented stimulus.

The U.S. Federal Reserve this week holds a two-day policy meeting and is expected to hold rates while elaborating on an earlier announcement of a shift to inflation targeting. The Bank of Japan and the Bank of England will announce their respective policy decisions on Thursday.

(Source: Financial Post)