Asian stocks mostly up but tempered by virus, election fears

HONG KONG (AFP) – Asian stocks rose yesterday, tracking a healthy lead from Wall Street as bargain-buyers moved in following a recent sell-off, though advances were limited by worries about fresh virus spikes and the reimposition of economically damaging containment measures.

Traders are also awaiting the first United States (US) presidential debate this week, which could prove crucial in determining November’s election, with many worried that a close vote might mean the result is delayed or even challenged by the loser.

Tech firms led strong gains in New York as a new surge in infections forces governments – particularly in Europe – to put new stay-at-home orders in place, leading investors to bet people will use their computers more.

And as the death toll from the disease topped one million, the World Health Organization warned that figure could double without more global collective action.

However, while many leaders are unveiling fresh fiscal measures to support their economies, US lawmakers remain at loggerheads over a second rescue package, with Democrats and Republicans miles apart on their proposals.

“The doomy mood music’s soundboard remains tuned to growing concerns about rising Covid-19 case counts and whether policymakers have ammunition to react,” said AxiCorp’s Stephen Innes.

People walk past a bank’s electronic board showing the Hong Kong share index in Hong Kong. PHOTO: AP

“In the US, this has centred on whether further fiscal stimulus might be forthcoming before the election.”

Jeffrey Halley of OANDA added, “The potential for a breakthrough that allows both sides to claim credit ahead of the election is still possible. A breakthrough should be strongly positive for markets.”

Asian markets were mostly in positive territory.

Tokyo, Mumbai, Seoul, Bangkok and Taipei were all one per cent higher, while Singapore and Manila put on 0.4 per cent each and Wellington was flat.

Hong Kong also rallied, though China’s biggest chipmaker Semiconductor Manufacturing International Corp (SMIC) tumbled five per cent on weekend reports that the US has placed export controls on it, marking the latest salvo in the battle for tech dominance between the superpowers.

Real estate giant China Evergrande surged 18 per cent after it made a statement on Friday seeking to reassure investors that its operations were “stable and healthy”.

The firm tanked nearly 10 per cent last week following reports claiming it was seeking government help to avoid a cash crunch. Shanghai and Sydney both dipped, however. In early trade, London rose one per cent, while Paris jumped 1.6 per cent and Frankfurt put on 1.7 per cent.

There was some cheer from news that profits at China’s biggest industrial firms grew for a fourth straight month, indicating the world’s number two economy is getting back on track after leaders brought the virus under control.

Investors kept an eye on yesterday resumption of trade talks between Britain and the European Union, hoping for a breakthrough despite feuding over a controversial UK bill that threatens to scupper a deal.

London and Brussels say a free-trade agreement must be struck by mid-October to allow time for it to be ratified before coming into force on January 1.