SINGAPORE / WASHINGTON (Reuters) – Asian stock markets declined on Thursday but were not as sharp as Wall Street moves overnight, while the oil boom and US futures bounced, as Asia’s fiery economic outlook offset investors’ fresh COVID- in Europe. 19 expressed concern about the lockdown.
MSCI has the largest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS Fell 1%. Nikkei of japan .N225 Hong Kong fell 0.8% and .HSI, Sydney .AXJO, Shanghai .SSEC And seoul .KS11 Were smaller than 1.5%.
This is much lower than the steep and 3.5% fall of the S&P 500 index .SPX Or 4.2% drop by Germany’s DAX .GDAXI Who led european stocks .STOXX Their minimum level since late May.
S&P 500 futures and Dow futures declined by 1%, which traders attributed to increased volatility and less apathy around Asia as China’s economy evaporates.
“Asia is not really biased in the story of this second or third wave because it is largely under its control,” said Rob Cornell, Asia’s chief economist at Dutch bank ING.
“As a result, domestic economies look justified. Exports will be soft … but domestically they are still doing much better and better than (Europe and America). “
Overnight oil hit a four-month low and the risk-sensitive Australian and New Zealand dollar rose nearly a quarter percent.
Still, both currencies are headed for weekly losses against the dollar and the euro, as concerns about the new lockdown were catching up to surprise investors.
In France, people will be required to stay in their homes from Friday, in addition to buying essential goods, seeking medical attention or exercising. Germany will close bars, restaurants and theaters from 2–30 November.
“As long as the market was traveling with hope, improving health care services in dealing with the epidemic would prevent the introduction of serious lockdowns,” National Australia Bank FX strategist Rodrigo Catril said in a note.
“At least in Europe, this dynamic has now changed … Now the question is whether America will follow the states.”
Central bank meetings and economic data remain the main focus on Thursday, with uncertainty gathering about the US bank. 3 elections also keep investors in the lead.
The Bank of Japan is set to maintain its large-scale incentive program and vow to take further action if the economic consequences of the virus are expected to cause deflation.
Investors expect the European Central Bank to hold off on new measures and instead signal action in December, which is likely to keep a lid on the euro.
A 10-day low in normal currency against the dollar and a hundred-day low was recorded on the yen at night before recovering slightly. It last bought $ 1.1751.
German unemployment and inflation figures, the European confidence survey and advance US GDP figures will also be closely watched – with US data likely to show record growth, but still leave the economy behind where it began in 2020 Was.
“Any disappointment in these numbers could have an impact on the market given the current weakness,” said Michael McCarthy, Sydney-based strategist at CMC Markets.
Investors are increasingly wary of the contested US election result that could spark a wave of risk-asset sales.
Wall Street’s “Fear Gauge,” Cobbe Volatility Index .VIX Wednesday has reached its highest level since June and a surge in implied currency volatility indicates a wild ride is expected.
The estimated volatility of the one-week yuan hit a five-year high on Thursday.
However, the US bond market was very sluggish, as investors showed up on the last polling day and felt that taking a huge government debt for coronovirus relief expenses did not matter who would win.
Benchmark US 10-year yields rose overnight and added about 0.7894% of base point on Thursday.
Seema Shah, principal strategist at Principal Global Investors, said, “Looking ahead, the volatility leading up to the election and potentially even after the election will increase.”
“The market will soon re-operate a trajectory dictated by fundamentals, rather than electoral news flows.”
Reporting by Tom Westbrook in Singapore and Pete Schroeder in Washington; Editing by Sam Holmes and Kim Coghill