Reuters | Oct 22, 2020 07:25
By Andrew Galbraith
SHANGHAI (Reuters) - Asian shares fell on Thursday and the dollar edged higher as investors fretted over the slow pace of U.S. 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.
Global investor sentiment has taken a fresh hit after U.S. 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 U.S. 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% of GDP, and 2.2 trillion which is Speaker Pelosi's package, is even higher at around 10% 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%, while the Nikkei was 0.66% lower.
Australian shares gave up 0.29%, Seoul's Kospi was off 0.87% and Chinese blue-chips lost 0.53%.
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 U.S. 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.
On Thursday, the dollar was 0.1% higher against the yen at 104.66, while the euro notched down 0.12% to $1.1847.
But against a basket of major peers, the dollar appeared relatively unaffected by setbacks to stimulus talks, trading only slightly higher at 92.736, steadying after touching a seven-week low.
"Markets are now pricing in a strong likelihood of a Biden Presidency perhaps even a clean sweep of Congress, and this is weighing on the USD, as they view a less confrontational trade environment. They will also probably be factoring in a large fiscal stimulus early next year, with none of the hold up that is currently preventing a deal," Rob Carnell, chief economist at ING in Singapore said in a note.
The yield on benchmark U.S. 10-year Treasury notes ticked down to 0.8092% from a U.S. close of 0.816% on Wednesday.
In commodity markets, oil prices extended sharp losses overnight, after higher U.S. gasoline inventories pointed to deteriorating fuel demand as coronavirus cases soar.
Gold eased as the dollar edged up, with spot gold down 0.52% at 1,914.56 per ounce.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.
More content, faster quotes and charts, and a smoother experience is available only on the App.