Asian markets rally on Covid-19 vaccine hopes

Asian stock markets have moved higher on good news about an effective vaccine for Covid-19

Japan's Nikkei 225 index opened more than 1.5% higher, to reach its highest level in almost 30 years.

Hong Kong's Hang Seng opened 1.8% higher while in China, the Shanghai Composite, also saw gains in morning trading.

Stock markets in Singapore, South Korea and Australia were also in positive territory.

"Japanese stocks are seen rallying for the sixth straight session, after the US market rocketed on news that a vaccine Pfizer and BioNTech are developing was 90% effective in protecting against Covid-19 infections," said a spokesman for Okasan Online Securities.

"It's big news amid worries about the virus infection spreading in Europe and in the US."

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In Japan, shares in carmaker Toyota and fashion retailer Uniqlo were both up by more than 2% on Tuesday.

Although gaming companies saw their shares prices head lower, with the possibility of an end to lockdowns prompting a sell-off.

Nintendo was down more than 5%, while Sony slipped by as much as 2%.

Global rally

On Wall Street on Monday, the Dow Jones Industrial Average rose 3%, while London's FTSE 100 jumped nearly 5%.

"Preliminary trials have caused markets to come alive, not that they needed much encouragement," Chris Weston, Pepperstone's Melbourne-based head of research, wrote in a note.

Markets were already building on gains from the election of Joe Biden as US president.

Pfizer said its Covid-19 vaccine, developed with German partner BioNTech, was more than 90% effective in preventing infection.

Pfizer and BioNTech said they had found no serious safety concerns yet and expected a regulatory decision as soon as December.

Tricky and expensive

While investors are in a buoyant mood, some observers are calling for caution.

"We're far from being out of the woods, yet," said Agathe Demarais, global forecasting director at the Economist Intelligence Unit (EIU).

"There will likely be bottlenecks around the actual manufacturing processes of the vaccine, and getting the jab rolled out across the world will be both tricky, and expensive," she added.

There are also concerns as to whether the vaccine continues to work after one year, and the need for regular boosters which would add on to costs for governments.

If the new vaccine is approved, the companies estimate they can roll out up to 50 million doses this year, and then produce up to 1.3 billion doses in 2021.

Pfizer shares lifted as much as 11% while BioNTech shares gained 12%.