LONDON - Stock markets and commodities continued to push higher on Tuesday, after the euphoria of a coronavirus vaccine had sent global equity indexes soaring to an all-time high and shaken bond yields higher.

Having surged 4 percent on Monday on the vaccine breakthrough from US and German drugmakers Pfizer and BioNTech, there was drop in the pace in Europe, though things were still moving forward.

The pan-European STOXX 600 was up another 0.4 percent, taking November's rally past 13 percent and though Wall Street looked set for a slow start, there was a further 2.7 percent rally in European banks as worries about mass loan defaults and even more negative interest rates continued to ease.

"We have some consolidation in markets but I don't think it's surprising given the size of the moves yesterday," said JP Morgan Asset Management's Hugh Gimber.

"The news we had was clearly a big step forward... it's a big piece of the jigsaw to getting the global economy back on its feet."

Asian markets had been playing catch-up overnight, having been closed when Monday's news of the vaccine broke, although like Wall Street overnight, they lost momentum by the end of the session.

Particularly encouraging was that the vaccine's trials had shown it to be more than 90 percent effective in preventing infection, much higher than expected.

Japan's Nikkei 225 closed up nearly 0.3 percent after being 1.1 percent higher in early trading which set a new 29-year high.

Australia's S&P/ASX 200 closed 0.7 percent higher after trading up as much as 1.6 percent, Hong Kong's Hang Seng closed up 1.1 percent and Singapore, the Philippines and Thailand gained 5.2 percent, 4.1 percent and 3.4 percent, respectively.

World airline stocks, which have been among the hardest hit by the pandemic, soared over 8 percent.

The Chinese mainland's CSI300 Index slipped 0.6 percent.

US tech had suffered on Monday too, Deutsche Bank's Jim Reid pointed out. The Nasdaq dropped 1.5 percent, COVID-19's video chat poster child Zoom fell 17 percent and sit-on-your-sofa winner Netflix slumped 8.6 percent. The Nasdaq was also set to open lower again later.

"It was like a big piece of elastic," JPMorgan's Gimber said about moves of COVID-19 winners and losers. "The further you stretch it the sharper it reverts, and the news of the vaccine was the catalyst for that reversion yesterday."

Game changer

The vaccine optimism was shared across all major asset classes. Oil prices were edging higher again in London trading after posting the biggest one-day percentage gain in five months on Monday.

The overnight rise had prompted some traders to take profit.

While stocks have also rallied on the assumption that Democrat Joe Biden would be the next US president, the top Republican in US Congress on Monday did not acknowledge Biden as president-elect, raising concerns about a rough transition of power.

Early on Tuesday, Japan's Prime Minister Yoshihide Suga had instructed his cabinet to design a fresh stimulus package as well.

In the currency markets, the yen strengthened as much 0.4 percent to 104.96 per dollar, while sterling was last trading at US$1.3230, up 0.5 percent on the day.

The risk-sensitive Australian dollar edged up 0.1 percent versus the greenback at US$0.7279, while Turkey's lira gave back nearly 2 percent of the 5.7 percnet surge it saw on Monday after the country's top economic chiefs were replaced.

The vaccine news had also sent long-dated US Treasury yields skyrocketing on Monday in their biggest one-day jump since March. The yield curve, an indication of risk appetite, hit its steepest level since March.

Bonds had their biggest selloff since recoiling from March peaks. The yield on benchmark 10-year US government debt, which rises when prices fall, jumped 10.3 basis points on Monday and held above 0.9 percent on Tuesday at 0.9099 percent.

In Europe, German Bund yields were near their highest in a month too, and Brent oil futures rose 9 cents, or 0.2 percent, to US$42.49 after their 8 percent vault the previous session.

"OPEC+ will now feel confident that a solution is actually on the horizon which will cure the oil markets current demand problem. It is not a pie in the sky, it is real and the solution is on its way," said Bjarne Schieldrop, chief commodities analyst at SEB.