TOKYO: Asian stocks slipped on Wednesday on growing uncertainty over whether US lawmakers would strike an agreement on an additional round of big fiscal stimulus to support an economy still struggling with the coronavirus pandemic.
Mainland Chinese shares fell 1.7%, weighed by worries about the economic recovery after data showed a slowdown in the country’s money supply and bank lending growth.On Wall Street, the S&P 500 snapped a seven-day winning streak after coming within reach of its all-time peak hit in February just before the global outbreak of the Covid-19.
“We have enormous uncertainty. It appears it’s getting harder for both sides to compromise as the election is nearing… Trump’s proposals would be smaller than markets have expected. There’s a question over whether they are viable, too,” said Junpei Tanaka, strategist at Pictet. On top of hedge selling ahead of the largest-ever 10-year note auction later in the day, bonds have lost some of their safe-haven allure also on rising hopes of vaccines against Covid-19.
Investors bought back hospitality industries stocks and other value-oriented shares, leading the old-economy centric Dow Jones to outperform the tech-focused Nasdaq. “In today’s instance, the vaccine news is likely not sufficient to change the macro narrative, insofar as it is seen as a medical mistake in advancing too quickly through testing procedures,” he said, referring to the Russian vaccine.
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