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Asian Shares Rebound to Finish Mixed, but Weak Global Sentiment Caps Gains

The major Asia-Pacific stock indexes settled mostly higher on Wednesday after reversing earlier losses. The turnaround occurred as investors continued to monitor Russia’s claim that it had developed the first coronavirus vaccine, while perhaps dampening gains was word of another stalemate in the U.S. Congress over coronavirus aid talks.

In the cash market on Wednesday, Japan’s Nikkei 225 Index settled at 22843.96, up 93.72 or +0.41%. Hong Kong’s Hang Seng Index finished at 25244.02, up 353.34 or +1.42% and South Korea’s KOSPI Index closed at 2432.35, up 13.68 or +0.57%.

China’s Shanghai Index settled at 2432.35, up 13.68 or +0.57% and Australia’s S&P/ASX 200 closed at 6132.00, down 6.70 or -0.11%.

Putin Claims Russia Has Registered World’s First Coronavirus Vaccine

Russian President Vladimir Putin announced Tuesday the registration of what Russia claims to be the first vaccine for the coronavirus in the world and said one of his daughters had already taken it.

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“As far as I know, a vaccine against a new coronavirus infection has been registered this morning, for the first time in the world,” he said at a meeting with members of the government, RIA Novosti reported.

The announcement was immediately met with international skepticism. Responding to the news, the World Health Organization said it is in “close contact” with Russian health authorities about the “possible pre-qualification process for a COVID-19 candidate vaccine which requires rigorous review,” Reuters reported, citing a WHO spokesman.

Meanwhile, J. Stephen Morrison of the Center for Strategic and International Studies said, Putin is trying to score “a domestic win” after mismanaging his country’s outbreak and failing to revive the economy.

“It’s a high risk, this is high risk of backfiring, particularly if there’s adverse impact and if they attempt to cover them up,” said Morrison.

In the Asia-Pacific region overnight, hopes of the vaccine development prompted some investors to reduce safe-have assets such as gold and government bonds, and to buy back battered stocks of companies hit hardest by the virus.

Uncertainty Driven by Lack of Progress in US Coronavirus Aid Talks

Asian sellers were also encouraged to dump shares as political gridlock between the Republican White House and congressional Democrats over coronavirus relief continued for a fourth day, with each party blaming the other for the lack of progress.

Barring a bipartisan deal, the U.S. economy could be left with measures U.S. President Donald Trump called for on Saturday through executive orders to bypass Congress.

China Stocks End Lower on Souring Global Sentiment, Soft Loan Growth

Chinese shares fell for a second straight session on Wednesday after global market sentiment soured on the prospect of a swift U.S. stimulus boost and as domestic data showed softer growth in bank lending.

Chinese banks extended 992.7 billion Yuan (R142.82 billion) in new Yuan loans in July, down sharply from 1.81 trillion Yuan in June and falling short of analysts’ expectations, data from People’s Bank of China (PBOC) on Tuesday showed.

Broad credit and liquidity growth quickened slightly. A stronger-than-expected rebound in activity in the second quarter has reduced the urgency for the PBOC to ease policy further, Reuters said.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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