Asian stocks follow Wall Street lower on lack of US aid

BEIJING (AP) — Asian stocks followed Wall Street lower yesterday as investors watched Washington for signs of whether political leaders can agree on an economic aid plan in the two weeks before the United States (US) November 3 presidential election.

Market benchmarks in Shanghai, Tokyo, Hong Kong and Seoul retreated. On Wall Street, the benchmark S&P 500 index lost 0.2 per cent on Wednesday as US political leaders wrangled over economic aid following the expiration of extra unemployment benefits that propped up consumer spending. Democrats are pressing US President Donald Trump’s Republicans to expand a proposed package.

The speaker of the House of Representatives, Nancy Pelosi, said she made progress in talks with the White House. But a potential agreement might face opposition in the Senate, where Majority Leader Mitch McConnell told fellow Republicans he warned the White House not to seal a relief deal before the election. “Fiscal stimulus deal optimism has faded,” said Mizuho Bank in a report. The Shanghai Composite Index lost 0.7 per cent to 3,302.55 and the Nikkei 225 in Tokyo shed 0.6 per cent to 23,489.51. The Hang Seng in Hong Kong retreated 0.1 per cent to 24,719.12.

The Kospi in Seoul was 0.7 per cent lower at 2,353.28 and Sydney’s S&P-ASX 200 declined 0.3 per cent to 6,173.80.

India’s Sensex opened down 0.2 per cent at 40,623.74. New Zealand, Singapore and Jakarta also retreated while Bangkok advanced.

Pedestrians pass the New York Stock Exchange. PHOTO: AP

Markets are swinging between optimism about possible development of a coronavirus vaccine and uncertainty about the US economic outlook without an aid package.

On Wall Street, the S&P 500 declined to 3,435.56. The Dow Jones Industrial Average lost 0.4 per cent. The Nasdaq composite gave up 0.3 per cent to 11,484.69.

Industrial and healthcare stocks declined. Communications services gained. Social media stocks rose after the photo service Snap reported bigger gains in revenue and users than expected. Google’s parent company rose 2.3 per cent, adding to its gains from a day before when the Justice Department sued it for antitrust violations.

Investors had already been expecting such action, and analysts said Google’s counterarguments mean it will likely take years to reach a resolution.

In energy markets, benchmark US crude lost 26 cents to USD39.77 per barrel in electronic trading on the New York Mercantile Exchange.

On Wednesday, the contract fell USD1.67 cents to USD40.03 a barrel on Wednesday. Brent crude, the price standard for international oils, shed 24 cents to USD41.49 per barrel in London.

The contract declined USD1.43 the previous session to USD41.73 a barrel.