Vaccine, stimulus hopes give legs to rally

Financial markets got a leg up this morning from positive developments in trials for coronavirus vaccines and hopes of more stimulus from the US and Europe.

Japan’s Nikkei 225 benchmark has advanced 0.63%, Australia’s S&P ASX 200 is up 1.31% and CSI 300 has climbed 0.62%. Risk sentiment remains positive after Wall Street’s gains overnight as the Dow Jones Industrial Average edged up 0.03%, the S&P 500 gained 0.84% and the Nasdaq Composite jumped 2.51% to yet another record high, its seventh peak in July.

European Union leaders are on the verge of an agreement on a stimulus package whose size is still being debated – an earlier proposal was for 750 billion euros ($858 billion).

Investors are hoping for another round of US economic stimulus after congressional Republicans announced plans to seek another $1 trillion in coronavirus economic relief.

DBS Bank analysts said there was optimism built around the possibility that Covid-19 vaccines could be found by September and that the EU may be able to finally break the Recovery Fund deadlock with negotiations having spilled into the fourth day.

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