ASX ends seven-day winning streak on COVID-19 vaccine delays

Australian shares have dropped for the first time, after seven consecutive days of gains.

Key points:

  • The ASX 200 has jumped 6.4pc since October 1
  • The Australian dollar has risen 2.8pc in the past three months
  • Markets fell after Johnson & Johnson and Eli Lilly delayed their COVID trials

    The run was the market’s longest “winning streak” since July 2009, and the drop came after Johnson & Johnson delayed trials of its experimental COVID-19 vaccine.

    The ASX 200 index closed 0.3 per cent lower at 6,179 points.

    However, it was a miniscule loss compared to the ASX’s surge (+7pc) over the previous seven sessions.

    The Australian dollar had also fallen (-0.6pc) to 71.7 US cents, on reports that China has stopped taking shipments of Australian coal.

    It was also weaker because the US dollar rebounded from a three-week low.

    Currency traders rushed to the safety of the greenback after a participant in Johnson & Johnson’s COVID vaccine became ill, and the company said it would take at least a few days to evaluate the situation.

    J&J said it did not yet know if that person was given the vaccine or a placebo.

    Investors see the quick introduction of a vaccine as key to helping economies recover.

    Meanwhile, the International Monetary Fund (IMF) has revised its forecasts and is predicting Australia’s economy will face a shallower-than-expected hit in 2020.

    Westpac also struck an optimistic note by saying consumer confidence surged to its highest level since July 2018, thanks to a “popular Budget” from the Federal Government.

    Pricing in ‘perfection’

    US drug maker Eli Lilly has also paused clinical trials of its COVID-19 antibody treatment, similar to one taken by US President Donald Trump recently, because of a safety concern.

    Any word on a vaccine?

    Whether you’re worried about the economy or when you’ll next be able to see your family in person,

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