© Reuters. A man walks past an electric screen that marks the indices of Japanese Nikkei and Shanghai Stock Exchange outside a broker in Tokyo2/2
By Swati Pandey and Chibuike Oguh
SYDNEY (Reuters) – A share of Asian equities lost Wednesday on losses in Chinese and Hong Kong equities, although it was still close to a seven-month peak, driven by ever-expanding policy stimulus aimed at the battle of a coronavirus pandemic.
In a statement for a positive start for Europe, futures for Eurostoxx 50 and Germany each rose 0.3%, while London futures added 0.2%.
E-Minis for the S&P 500 was last up 0.15%.
Asian stocks had also started the day on a positive note before picking up gains in Chinese and Hong Kong stocks.
MSCI’s broadest index of shares in Asia-Pacific outside Japan snapped two straight days of profit, dipping 0.1% after previously hitting a high of 571.33 points, a level not seen since late January.
China’s blue chip index slipped 1% after a strong rally in recent days, while Hong Kong’s was 0.9%.
Australian shares ended 0.8% higher and South Korea added 0.8%. rose 0.25%.
While emerging markets found some support from the environment with low yields and a weaker US dollar, concerns about the economic hit of the pandemic caused investors to keep jittery, analysts said.
“Continued economic impacts of the current crisis and limited capacity for fiscal and monetary stimulus, except for China, have been waiting for sentiment despite the decline in the USD,” analysts at T. Rowe Price wrote in a note.
“While a lower USD removes a significant headwind for emerging market assets, greater risks abound for broader EMs as they continue the crisis.”
On Tuesday, both the S&P 500 and set records soon after the opening clock, helped by strong sales growth reported by major U.S. retailers including Walmart (NYSE :), Kohl’s (NYSE 🙂 and Home Depot (NYSE :).
The closely-watched S&P 500 topped a record high in February just before the start of the COVID-19 pandemic, pushing the benchmark index to a low on March 23. The index has since grown by about 55%.
In just 126 days, this is “the fastest recovery of the bear market ever”, said Tapas Strickland, economist at Melbourne-based National Australia Bank (OTC :).
Nasdaq closed its 18th record since early June.
The US Federal Reserve’s intervention in financial markets to maintain liquidity in the midst of the coronavirus pandemic has prompted risk-taking measures to slow down and reduce demand for safe havens, weakening the greenback.
Market optimism was also driven by data showing an acceleration in U.S. homebuilding to its peak in nearly four years in July, indicating that the home sector is emerging as one of the few strengths.
In addition, hopes of an interim fiscal package resurfaced last night with House member Nancy Pelosi, indicating that the willingness was to cut back on their proposals to seal a deal, noted NIC’s Strickland.
Sections also drew close attention to minutes from the Fed’s recent meeting later in the day “for hints about what the Fed could announce regarding the September lead,” Strickland said.
The Fed has cut rates to near zero to support matters through the pandemic, sending the dollar to a 27-month low.
It was last changed barely at 92.22 from above-100 in March. The Japanese yen from the safe haven was slightly lower at 105.50 versus the greenback.
The risk-sensitive Australian dollar traded close to $ 0.7250, while the latter bought $ 0.6621.
Gold flirting with key mapped resistance of $ 2,000 an ounce to last at $ 1,989.6.
FS were a shadow weaker at $ 2,001.5.
Oil prices shook as concerns grew that demand for U.S. fuel might not return rapidly. [O/R]
40 cents down at 45.06 and off 32 cents at $ 42.57.
