Asia-Pacific markets trade lower as vaccine optimism clashes with economic worries

SINGAPORE — Asia-Pacific markets fell in morning trade on Thursday as traders grapple with optimism around a potential coronavirus vaccine and economic worries.

In Australia, the benchmark ASX 200 was down 0.35% where resource producers struggled for gains. The country’s so-called Big Four banks traded mixed, with Westpac up by 0.98%.

Japan’s Nikkei 225 declined 0.55% in early trade while the Topix index was down 0.41%. In South Korea, the Kospi index fell 0.51%.

The session in Asia follows U.S. stocks falling for a second straight day, pausing a recent rally to new records.

“It was a consolidative day for financial markets, which are caught in the crosscurrent of vaccine optimism and near-term economic weakness,” Daniel Been, head of foreign-exchange and G3 research at ANZ, wrote in a morning note.

Pfizer and BioNTech on Wednesday said that a final data analysis found their coronavirus vaccine was 95% effective in preventing Covid-19 and appeared to fend off severe disease. Meanwhile Moderna said preliminary phase three trial data showed its vaccine was more than 94% effective.

Still, as cases continue to climb, particularly in the U.S., authorities are moving to reinstitute some of the stay-at-home orders, curfews and public safety measures, including shutting down nonessential businesses in a handful of cities. There are growing worries that if the infection spread is not contained, widespread lockdowns could be reinstated.

Currencies and oil

The dollar index, which measures the U.S. dollar against a basket of its peers, last traded at 92.316, slipping from levels near 93.00 last week.

U.S. dollar “continues to be driven by conflicting headlines around vaccine progress and high infection rates (and renewed lockdowns),” said Kim Mundy, senior economist and currency strategist, at the Commonwealth Bank of Australia, in a morning note.

“The risk is that a vaccine is not ready fast enough to offset near‑term economic damage of widespread lockdowns as a number of countries battle to get infection rates back under control,” Mundy said.

The Japanese yen traded up 0.1% at 103.94 against the greenback while the Australian dollar changed hands at $0.7287, dropping from earlier levels around $0.73.

Oil prices traded mixed: U.S. crude futures were down 0.74% at $41.51 per barrel while global benchmark Brent last traded at $44.34.

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