SHANGHAI (Reuters) – Asian stocks fluctuated on Thursday as investors weighed hopes of further stimulus to support pandemic-affected economies against a dramatic rise in tensions between the United States and China.
FILE PHOTO: A security guard wearing a face mask stands near the Bund Financial Bull statue and a screen showing an image of a medical worker following the new outbreak of coronavirus disease (COVID-19), in The Bund in Shanghai, China on March 18. 2020. REUTERS / Aly Song / File Photo
European stocks were pegged for profit, with pan-European Euro Stoxx 50 futures rising 0.36%, German DAX futures rising 0.27% and FTSE futures rising 0.11% on early offers.
S&P mini futures added 0.09%.
Washington’s order to Beijing to close its consulate in Houston, Texas, amid spying allegations, had previously influenced sentiment in Asia, lowering shares.
China said the order was an “unprecedented escalation” by Washington, and a source said Beijing was considering closing the US consulate in Wuhan in retaliation.
United States President Donald Trump said other consulate closings were “always possible.”
But in the afternoon in Asia, the broader MSCI index of Asian stocks outside of Japan was 0.18% higher as Chinese stocks reduced losses. The Shanghai benchmark index lost 0.6% after a previous drop of more than 2%.
Australian stocks regained their position to increase 0.25% and Hong Kong’s Hang Seng Index was 0.43% higher.
Nikkei futures posted a 0.09% gain at 22,805, with the Japanese markets closed for the holidays.
Unprecedented stimulus measures to boost battered economies will continue to provide structural support for riskier assets, said Kay Van-Petersen, global macro-strategy for Saxo Capital Markets in Singapore.
“The liquidity forces are unmatched … we are seeing what happened after the GFC, but we are seeing it on steroids,” he said.
“It is rare that you see monetary and fiscal policy activated, and when they are activated they only activate a little bit.”
At the same time, a further escalation of Sino-US tensions was increasingly likely, with a breach of the Phase 1 trade agreement between China and the United States as the biggest short-term risk to markets, he said.
Investors will also be keeping a close eye on the weekly numbers of US jobless claims due at 1230 GMT for the latest indications of how the new coronavirus pandemic has affected the US economy. The United States recorded more than 1,100 new coronavirus deaths for the second consecutive day on Wednesday.
Overnight, the Dow Jones Industrial Average rose 0.62%, the S&P 500 gained 0.57%, and the Nasdaq Composite added 0.24%.
In the commodity markets on Thursday, spot gold fell 0.12% to $ 1,869.57 per ounce, but remained close to a nine-year peak, with prices rising more than 23% for the year. Investors have flocked to safe haven as they seek refuge from a possible reversal in US equities.
Gold has been helped by a weak dollar, which remained in the depression near the lows of more than four months on Thursday, falling 0.16% to 94,860.
The greenback had little change against the yen at 107.15, while the euro rose 0.16% to buy $ 1.1587, close to a 21-month high.
Oil prices rose, with US crude adding 4 cents to $ 41.94 a barrel and world benchmark crude Brent up 2 cents to $ 44.31 a barrel.
Reports by Andrew Galbraith and Elizabeth Dilts Marshall in NEW YORK; Editing by Kim Coghill
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