TOKYO (AP) – Asian shares other than those in China advanced yesterday, cheered by a modest rally on Wall Street and rising hopes for fresh stimulus for the United States (US) economy.
Despite signs of a global economic rebound in the third quarter, worries remain the upturn may be running out of steam.
House Democrats said they are paring back their proposal for a new stimulus package in an attempt to jump-start negotiations with the Trump administration. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell have said the government’s top priority should be to provide affordable loans to small businesses and further support for millions of Americans still unemployed. (See also Page 16).
Paralysing partisanship has prevented a Congressional renewal of aid, and the recent vacancy on the Supreme Court following the death of Justice Ruth Bader Ginsberg deepened the divide. The renewed optimism that the biggest economy might get another boost carried over into yesterday’s trading.
“This stimulus deal needs to go through,” Stephen Innes of AxiCorp said in a commentary.
“With the risks building up everywhere you look, it doesn’t seem to be a great time to be trying to pick the bottom of equity markets, but a stimulus relief bill will go a long way to nudging the market along.”
Japan’s benchmark Nikkei 225 edged up 0.6 per cent to 23,214.38. Australia’s S&P/ASX 200 gained 1.5 per cent to 5,964.90, while South Korea’s Kospi added 0.6 per cent at 2,285.09.
Hong Kong’s Hang Seng gave up earlier gains, sinking 0.7 per cent to 23,146.61. The Shanghai Composite index fell 0.4 per cent to 3,209.85.
Shares rose in India but fell in Taiwan and Thailand. On Wall Street, the S&P 500 rose 0.3 per cent to 3,246.59 after swinging between a loss of 0.9 per cent and a gain of 1.3 per cent.
The market’s momentum has shifted with lightning speed recently, often changing direction by the hour.
The US presidential election is a big factor, particularly after US President Donald Trump’s refusal on Wednesday to commit to a peaceful transition of power if he lost, and rising tensions between the US and China.
Adding to the uncertainty is the question of how soon drug makers will be able to develop a coronavirus vaccine to stem future waves of outbreaks.
“We’re focussed on the strategic and the long-term, rather than the day-to-day, because it’s going to be volatile between now and the election,” said George Rusnak, Head of Investment Strategy at Wells Fargo Private Wealth Management.
The Dow Jones Industrial Average gained 0.2 per cent to 26,815.44. The Nasdaq composite added 0.4 per cent to 10,672.27. The Russell 2000 index of small company stocks inched up less than 0.1 per cent, to 1,451.82.
Thursday’s headline report showed that 870,000 workers filed for unemployment claims last week, worse than economists had expected.
Layered on top of all the myriad concerns are the still-raging coronavirus pandemic and the threat that worsening counts around the world could lead to more business restrictions.
In energy trading, benchmark US crude rose two cents to USD40.33 a barrel in electronic trading on the New York Mercantile Exchange.