Asian shares mixed as boost from US stimulus package fades

Elaine Kurtenbach

AP – Asian shares were mixed yesterday after a lacklustre day on Wall Street, as the boost from United States (US) President Donald Trump’s signing of the coronavirus relief package faded.

Benchmarks fell in Tokyo and Sydney but rallied in Hong Kong, Seoul and Shanghai.

The S&P 500 lost 0.2 per cent on Tuesday, a day after major indexes notched their latest all-time highs after Trump signed the USD900 billion economic relief package.

An effort by Trump to get bigger, USD2,000 COVID-19 relief cheques for individuals has stalled in the Republican-led Senate. For now, USD600 cheques are set to be delivered, along with other aid, in one of the largest rescue packages of its kind.

Investors have been waiting months for such help, which economists said is needed to tide the economy over as coronavirus caseloads surge, leading governments to reimpose restrictions to stem the pandemic.

Hong Kong’s Hang Seng surged 1.6 per cent to 26,989.87, while the Shanghai Composite index advanced one per cent to 3,411.44. South Korea’s Kospi jumped 1.9 per cent to 2,837.08.

People walk by an electronic stock board of a securities firm in Tokyo. PHOTO: AP

Japan’s Nikkei 225 fell 0.5 per cent to 27,444.17, a day after it surged more than two per cent to its highest level in more than 30 years. Japanese markets are closed today through the end of the week, re-opening on January 4.

In Australia, the S&P/ASX 200 lost 0.3 per cent to 6,682.40. Shares rose in Taiwan but fell in India and Southeast Asia.

“After a meteoric rise as risk dominoes toppled one by one this week, stocks fell back to earth a bit overnight,” Stephen Innes of Axi said in a commentary. “And while larger stimulus paycheques would always be a welcome addition to the Q1 consumption bonanza, the current stimulus level as it sits will drive US growth sufficiently higher bridging the gap when people get vaccinated and return to those activities most impacted by COVID-19 such as dining out, travelling and other personal service-related areas.”

Stocks closed modestly lower on Tuesday as investors turned cautious a day after major indexes closed at their latest record highs.

The S&P 500 slipped 0.2 per cent, in its first decline in four days as investors shifted money away from technology companies, which have been among of the biggest winners since the pandemic began.

Small-company stocks, which have been the biggest gainers this month, fell more than the rest of the market, pulling the Russell 2000 index of smaller companies 1.8 per cent lower, to 1,959.36. It is still on track to end the month 7.7 per cent higher, more than twice as much as the S&P 500.

The S&P 500 fell 8.32 points to 3,727.04. The Dow Jones Industrial Average dropped 0.2 per cent, to 30,335.67. The tech-heavy Nasdaq slid 0.4 per cent, to 12,850.22.

With two days of trading left in 2020, the S&P 500 is up 15.4 per cent this year, while the Nasdaq is up 43.2 per cent.

“We’re kind of seeing the same thing we’ve been seeing, the dichotomy between where the financial markets are and where the actual economy is,” said senior investment strategist for Allianz Investment Management Charlie Ripley.

The recent round of aid from Washington was mostly expected and it would have taken a much bigger package to really make markets jump, he said.

Treasury yields moved higher, a sign of confidence in the economy. The yield on the 10-year Treasury rose to 0.94 per cent from 0.93 per cent late Tuesday.

US benchmark crude oil gained 16 cents to USD48.16 per barrel in electronic trading on the New York Mercantile Exchange. It picked up 38 cents to USD48.00 per barrel on Tuesday.

Brent crude, the international standard, added 11 cents to USD51.34 per barrel.

The US dollar fell to JPY103.34 from JPY103.54. The euro rose to USD1.2280 from USD1.2249.