Asian stocks dip as U.S. political concerns grow

In this news, we discuss the Asian stocks dip as U.S. political concerns grow.

SYDNEY / NEW YORK (Reuters) – Asian stocks slipped Tuesday as investors adjusted risk exposure ahead of the U.S. election and the deadline for Washington to pass an economic stimulus bill approached, while Europe reported record daily coronavirus infections.

The MSCI’s largest Asia-Pacific stock index outside of Japan was 0.11% lower after US stocks ended the previous session in the red. The Australian and Japanese markets also fell, and MSCI’s stock gauge across the world was 0.09% lower.

Chris Weston, head of research at Melbourne’s Pepperstone brokerage, said that while there were concerns about the US stimulus package, the recent declines were likely due to positioning ahead of the November 3 presidential election. .

“Are you sure you want to maintain these exposures in what could be a volatility event?” Weston said. “We are entering the territory of the Far West where it becomes more fiery.”

The caution of investors around the world was also motivated by growing concerns about the risk of a contested US election outcome.

“Such an event would most likely turn world markets upside down until the United States comes to an agreed resolution,” said Keith Creveling, co-CIO of American Century.

Japan’s Nikkei slipped 0.34%. Hong Kong’s Hang Seng Index resisted the 0.16% uptrend.

Investors await key earnings results later in the week for companies including Netflix Inc and Tesla Inc.

They were also waiting to see if the final debate between US President Donald Trump and his Democratic challenger Joe Biden on Thursday changes the trajectory of the election.

The number of new COVID-19 cases in the United States last week rose 13% to more than 393,000, approaching levels last seen in a summer peak, according to a Reuters analysis.

The Dow Jones Industrial Average fell 1.44%, the S&P 500 fell 1.63% and the Nasdaq Composite fell 1.65%.

European stocks closed lower as the surge in COVID-19 cases raised investor concerns. Parts of the UK have been locked out and France has imposed curfews.

Unlike the equity markets, currency markets were less pessimistic about the prospect of a stimulus breakthrough with the safe haven dollar slightly lower as U.S. lawmakers could still agree on a fiscal stimulus package at the 11th hour.

The greenback’s movements, however, were modest with the dollar index 0.015% lower on Tuesday. The dollar rose 0.03% against the yen to 105.46 while the euro rose 0.03% to $ 1.1772.

The Australian dollar fell 0.2% against the greenback to $ 0.7045, penalized by expectations that the central bank would cut rates soon and expand its massive bond-buying campaign to cut costs. ‘loan.

In oil markets, US West Texas Intermediate (WTI) crude futures fell 0.3% to $ 40.69 a barrel while Brent futures plunged 0.6% to $ 42.36 per barrel.

(This story corrects to add a lost word in paragraph 2)

Editing by Sam Holmes

Original © Thomson Reuters

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