Shares down as US stimulus talks drag
SHANGHAI (Reuters) – Asian shares fell on Thursday and the dollar edged higher as investors fretted over the slow pace of US stimulus talks and a surge in global cases of COVID-19.
The falls in Asia looked set to continue in Europe, putting European shares on track for a fourth straight session in the red.
In early European trade, pan-region Euro Stoxx 50 futures were down 0.5 percent, German futures shed 0.52 percent and FTSE futures slipped 0.39 percent to 5,722.5.
Global investor sentiment has taken a fresh hit after US President Donald Trump accused Democrats on Wednesday of being unwilling to craft an acceptable compromise on fresh stimulus, following reports of progress earlier in the day.
It remains unclear whether stimulus negotiations would continue ahead of the US presidential and congressional elections on Nov. 3.
“We still think that this deal will remain elusive in the sense that this amount that we are talking about, $1.88 trillion, that’s about 9 percent of GDP, and 2.2 trillion which is Speaker Pelosi’s package, is even higher at around 10 percent of GDP,” said Anthony Chan, chief Asia investment strategist at Union Bancaire Privee (UBP) in Hong Kong.
“Even if both sides do manage to reach an agreement, given the tight deadline ahead of the election it’s unlikely that something like that would be able to go through the Senate smoothly.”
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.31 percent, while the Nikkei was 0.66 percent lower.
Australian shares gave up 0.29 percent, Seoul’s Kospi was off 0.87 percent and Chinese blue-chips lost 0.53 percent.
Uncertainty over the passage of a bill to stimulate a pandemic-ravaged economy comes as the United States faces a new wave of COVID-19 cases.
Nearly two-thirds of US states were in a danger zone of coronavirus spread and six, including election battleground Wisconsin, reported a record one-day increase in COVID-19 deaths on Wednesday.
Against that backdrop, Wall Street’s three major averages closed lower on Wednesday after a choppy trading session.
The Dow Jones Industrial Average inched lower by 0.35 percent, while the S&P 500 lost 0.22 percent. The tech-heavy Nasdaq Composite dropped 0.28 percent.
On Thursday, the dollar was 0.1 percent higher against the yen at 104.66, while the euro notched down 0.12 percent to $1.1847.