Asian shares fell because the S&P slid and the virus soared

© Reuters. FILE PHOTO: Passers-by wearing protective face masks walk past a screen showing the Nikkei stock average and global stock indices during the coronavirus disease (COVID-19) outbreak in Tokyo

By Wayne Cole

SYDNEY (Reuters) – Asian stocks got off to a hesitant start to the week on Monday as rising coronavirus cases in Europe and the United States undermined the global outlook as China’s leaders meet to ponder the economic giant’s future.

The US has had the highest number of new COVID-19 cases in the past two days, while France has also kept unwanted case records and Spain has announced a state of emergency.

This was accompanied by no clear progress on a US stimulus package to cut the S&P 500 futures by 0.6% (). EUROSTOXX 50 futures () were down 0.7% and futures () by 0.4%.

The broadest MSCI index for stocks in the Asia-Pacific region outside Japan () rose 0.1%, still below its most recent high of 31 months. The Japanese Nikkei () fluctuated on both sides of the steady and the main South Korean index lost 0.3% ().

Chinese blue chips () were down 0.5% as the country’s leaders met to set the country’s economic course for the 2021-2025 period. It has balanced growth and reform with the United States in the face of uncertain global prospects and mounting tensions.

Chart – Asian Equity Markets:

In a week of monetary policy, three major central banks meet. Bank of Canada and Bank of Japan are expected to catch fire for now, while the market expects the European Central Bank to be cautious about inflation and growth even if they skip further easing.

Data released on Thursday is expected to show US economic output recovering 31.9% in the third quarter after the historic second quarter collapse led by consumer spending.

Westpac analysts noted that such a rebound would still keep GDP roughly 4% lower than it was late last year, with corporate investment still lagging sharply.

“In order to fully recover lost activity, additional sensible fiscal incentives are a must,” they argued in a note.

The US presidential election will once again be a big deal as markets move the chance of a Democratic President and Congress to price, which would likely lead to more government spending and borrowing.

This outlook reached 0.8720%, its highest level since the beginning of June last week. They were trading at 0.83% on Monday.

“We’ve increased the likelihood of a democratic sweep, already our base case, from 40% to just over 50%, and increased our expectation that Biden will win from 65% to 75%,” analysts at NatWest Markets wrote in a note.

“We see steeper US yield curves and a weaker USD than likely in our base case.”

The dollar was flat on Monday after largely falling last week. The euro held at $ 1.1836 (), just below its recent high of $ 1.1880, while the dollar was held at 104.86 yen, not far from last week’s low of $ 104.32.

The value was a bit firmer at 92.904 () after losing nearly 1% last week.

In the commodity markets, gold was down 0.1% to $ 1,898 an ounce.

Oil prices continued to fall in anticipation of a surge in supply and demand concerns in Libya caused by rising coronavirus cases in the US and Europe.

Brent Crude Oil () futures lost 73 cents to $ 41.04 a barrel, while U.S. Crude Oil () also fell 73 cents to $ 39.12.

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