GLOBAL MARKETS-Asian stocks dip as U.S. political concerns grow
By Paulina Duran and Jessica DiNapoli
SYDNEY/NEW YORK, Oct 20 (Reuters) - Asian stocks slipped on Tuesday as investors adjusted risk exposure heading into the U.S. election and as a deadline for Washington to pass an economic stimulus bill approached while Europe reported record daily coronavirus infections.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was 0.11% lower after U.S. stocks ended the previous session in the red. Australian .AXJO and Japanese .N225 also dipped and MSCI's gauge of stocks across the globe .MIWD00000PUS was 0.09% lower.
Chris Weston, the head of research at Melbourne brokerage Pepperstone, said while there were worries about the U.S. stimulus package, recent declines were likely due to positioning ahead of the Nov. 3 presidential election.
"Do you really want to hold those exposures into what could be a volatility event?" Weston said. "We're getting into the Wild West territory where it becomes more whippy."
Caution among investors globally was also driven by rising concerns about the risk of a disputed U.S. election outcome.
"Such an event would very likely upset global markets considerably until the U.S. reaches an accepted resolution," said American Century co-CIO Keith Creveling.
Japan's Nikkei .N225 slipped 0.34%. Hong Kong's Hang Seng index .HSI bucked the trend to rise 0.16%.
Investors await key earnings results later in the week for companies including Netflix Inc NFLX.O and Tesla Inc TSLA.O.
They were also waiting to see if the final debate between U.S. President Donald Trump and his Democratic challenger Joe Biden on Thursday shifts the trajectory of the election.
The number of new COVID-19 cases in the United States last week rose 13% to more than 393,000, approaching levels last seen during a summer peak, according to a Reuters analysis.
The Dow Jones Industrial Average .DJI fell 1.44%, the S&P 500 .SPX was 1.63% lower and the Nasdaq Composite .IXIC settled down 1.65%.
European shares closed lower as surging COVID-19 cases raised investor concerns. Parts of the UK were put into lockdown and France imposed curfews.
In contrast to equity markets, currency markets were less pessimistic about the prospect of a stimulus breakthrough with the safe-haven dollar edging slightly lower amid expectations that U.S. lawmakers might still agree on a fiscal stimulus package at the 11th hour.
Greenback moves, however, were modest with the dollar index =USD 0.015% lower on Tuesday. The dollar rose 0.03% against the yen to 105.46 JPY= while the euro EUR= was up 0.03% to $1.1772.
The Australian dollar AUD=D4 fell 0.2% versus the greenback at $0.7045, hurt by expectations that the central bank would soon cut rates and expand its massive bond buying campaign to lower borrowing costs.
In oil markets, U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 0.3% to $40.69 a barrel while Brent crude LCOc1 futures dipped 0.6% to $42.36 a barrel.
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
MSCI All Country Wolrd Index Market Caphttp://tmsnrt.rs/2EmTD6j
(Editing by Sam Holmes)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Latest Markets Videos
- White House says Walmart, FedEx, UPS to work 24/7 to ease supply bottlenecks for holiday season
- Chinese online brokers Futu and UP Fintech face regulatory risks - People's Daily website
- PRECIOUS-Gold eases as inflation data fans policy tightening bets
- September, Third Quarter 2021 Review and Outlook