A renewed spike in Covid-19 cases across Asia has triggered a sharp rally in regional healthcare equities, notably among companies active in diagnostic kits, vaccines, and therapeutics. The uptrend in infections has accelerated demand for medical solutions, directly impacting valuations and investor sentiment toward select pharmaceutical and biotech stocks.

On Monday, stocks of Asian companies involved in the production of diagnostic kits and vaccines experienced a significant surge. This reaction came in response to a recent study conducted by researchers at the Wuhan Institute of Virology in China. The research uncovered a new coronavirus in bats that utilizes similar mechanisms to enter cells as the virus responsible for Covid-19.