Shares in Asia on Wednesday mostly rose after a worldwide rally on Wednesday with the expectation that a COVID-19 vaccine would help the global economy return to normal.
The benchmark advanced in Tokyo, Seoul, and Sydney, but lower in Hong Kong and Shanghai, where new Chinese regulations focused on technology companies and driven sales in that region.
The proposed rules, released on Monday for public comment, provide guidelines on how China’s 2008 anti-monopoly law will be applied to Internet companies. The announcement gave no indication that wrongdoing had been cited on the operators, but cited areas where regulators could look for problems, including the cost of information and alliances or pricing services to keep new competitors.
By mid-day, shares of e-commerce giant Alibaba had fallen by 7.3% and Tencent, the owner of the popular WeChat social media platform, had lost 5% and online retailer JD.com was down 6.2%.
In Hong Kong, the Hang Seng declined 0.2% to 26,241.52 and the Shanghai Composite Index dipped 0.2% to 3,353.88.
But other regional markets were mostly high. Japan’s Nikkei 225 index rose 1.2% to 25,197.68 and the S & P / ASX 200 rose 1.3% to 6,419.50 points. South Korea’s Kospi rose 0.7% to 2,470.11.
On Wall Street, shares fell on Tuesday after a powerful rally around the world a day earlier. It was the second straight day that rising hopes for a COVID-19 vaccine prompted investors to re-run what stocks they saw winning and losing.
Treasury yields and oil held on to their large gains from a day earlier strengthened confidence in the economy.
The S&P 500 dipped 0.1% to 3,545.53 after reducing initial losses. The Dow Jones Industrial Average rose 0.9% to 29,420.92 and the Nasdaq Composite fell 1.4% to 11,553.86.
The flashpoint for all moves was announced on Monday by Pfizer that a potential COVID-19 vaccine that is being developed with German partner BioNTech maybe 90% effective, based on preliminary but incomplete test results.
Stocks of smaller US companies, which want to grow higher with expectations for the economy than their larger counterparts, rallied again. The Russell 2000 index of small-cap stocks rose 1.9% to 1,737.01, finally coming back in January. This is just 0.2% below its record high set in 2018.
Many areas of the market have been hit through epidemics and whose lower prices make them look like potentially better prices. For example, the energy stocks in the S&P 500 rose 2.5% for the best gains among the 11 sectors that make up the index, although they are still down about 44% for 2020.
Big tech stocks that propel the stock market through the epidemic are suddenly facing more scrutiny for their higher prices. If the economy is in lockdown mode, their stocks go up by 2020. But even after accounting for their large profits, their prices continue to look expensive.
Amazon, which is one of those Big Tech stay-at-home winners, fell 3.5%. It is facing contradictory charges filed on Tuesday by EU regulators, accusing it of using its access to the data to gain an unfair advantage over merchants using its platform.
Microsoft fell 3.4%, and Facebook lost 2.3%. Those drops have impacted the S&P 500 as they are some of the largest companies in the market price index.
The S&P 500 is already up 8.4% in November, helped by hopes for a coronavirus vaccine and uncertainty about US leadership after Democrat Joe Biden’s required vote of 270 electoral votes to become the next president Helped to overcome. Republicans, meanwhile, appear likely to take control of the Senate.
Some analysts are referring to a “Goldilocks” scenario, where low tax rates and other pro-trade policies remain, while a more stable and predictable set of policies comes out of the White House.
Many risks remain, and the biggest one may be whether investors have become convinced of a potential COVID-19 vaccine.
Coronavirus counts continue at alarming rates throughout the US and Europe. Prompting some governments to reinstate restrictions on businesses.
“The biggest downside remains COVID and how severe this wave is going to be,” Craig Erlam of Oanda said in a comment, “COVID is impossible to ignore, especially in cases that are once again on the rise and Growth is increasing. ”
With new help for the US economy still undecided from Congress, there is pressure on central banks to increase support for markets.
“In fact, the end of this year combined with one or more vaccines could provide the perfect cocktail of comprehensive monetary and fiscal easing,” he said.
President Donald Trump’s refusal to ally with and collaborate with Biden’s transition team is another source of uncertainty, notably behind Trump’s efforts to fight most of Senate leader Mitch McConnell’s election results, including some Republicans Do rally