* Asian Stock Markets: tmsnrt.rs/2zpUAr4
* Mixed Asian stocks, cautious sentiment
* Watch the talks on the tax support package in the EU and the US.
By Swati Pandey
SYDNEY, Jul 20 (Reuters) – Asian stocks started cautiously on Monday as investors watched efforts to unite more fiscal stimulus in the eurozone and the United States to help economies overcome the effects of a record jump in cases of COVID-19 worldwide.
MSCI’s broader index of Asia-Pacific stocks outside of Japan held steady at 541.49, with Australian stocks down 0.3% and South Korea’s KOSPI just slightly more.
Japan’s Nikkei was up 0.1%.
E-minis for the S&P 500 rose 0.1% in early Asian operations.
Last week, the European, US and other equity markets posted their third consecutive weekly gain, although the pace of the rebound has slowed.
The Dow fell 0.23% on Friday, the S&P 500 gained 0.29% and the Nasdaq Composite added 0.28%.
Investors’ focus is directly focused on a European Union Summit where leaders are haggling over a plan to revive economies strangled by the COVID-19 pandemic.
Leaders disagree on how to divide a vast recovery fund designed to help lift Europe out of its deepest recession since World War II, and what measures to assign to countries that would benefit. Diplomats said they might leave the summit and try a deal again next month.
In response, the euro opened 0.2% lower in early Asian trading to go as low as $ 1.1400. Last time it rose 0.2% to $ 1.1442.
“The commitment of EU leaders to extend the talks and reports of new talks if an agreement is not reached today shows the desire to have the recovery fund in some form,” said NAB analyst Tapas Strickland.
However, it was likely “a very long and winding road” before an agreement was reached, he added.
In the United States, Congress will begin debating a new aid package this week, as several states in the south and west of the country implement new blocking measures to curb the virus.
The virus has claimed more than 140,000 American lives in total since the pandemic began, and records are destroyed daily by Florida, California, Texas, and other southern and western states.
The United States, with 3.7 million cases in total, has almost as many infections as the following three most affected countries: Brazil, India and Russia.
“Wall Street remains optimistic, but sentiment on Main Street is turning grim in response to the surge in COVID-19 cases that is causing a renewal of the closure restrictions,” said Oxford Economics in a note.
“The laid-off workers are more pessimistic about getting their jobs back; they are also increasingly concerned about loss of income if a new relief tax package is not delivered. ”
Fiscal support is also a focus in Australia, where the government will launch a ‘mini budget’ later this week.
In currencies, the dollar was slightly higher than the Japanese yen at 107.06. The British pound was mostly flat at $ 1.2571.
The Australian dollar increased 0.1% to $ 0.7002. That left the dollar index barely changed at 95,905.
In raw materials, spot gold held flat at 1,808.5 an ounce.
US crude rose 6 cents to $ 40.65 a barrel and Brent rose 2 cents to $ 43.15.
Swati Pandey’s report; editing by Richard Pullin
.
