Asian stocks still edged up, despite overcast Wall Street

The MSCI Asia-Pacific (excluding Japan) still inched 0.2 percent in the morning session of October 7 thanks to a push from Australian stocks after rising 0.8 percent.

Hong Kong’s Hang Seng Index rose 0.7% in the morning session of October 7. Documentary photo: AFP

Asian stock markets still rallied despite Wall Street last night “red floor” after US President Donald Trump abruptly canceled negotiations with lawmakers on the new economic stimulus package.

The tweet posted on his personal page stated that Mr. Trump had canceled negotiations with the Democrats, and confirmed that the negotiations would be stopped after the election was completed. Trump also promised another bill on a large-scale stimulus package.

President Trump’s move to stop negotiating the economic stimulus package made Wall Street plummet last night and safe assets such as the US dollar and bonds all went up. However, investors in Asia do not seem much worried because the stimulus package was delayed instead of deviating from the track.

On the Hong Kong stock market, the Hang Seng is still up 0.7%, while in Japan, the Nikkei index slipped 0.2%. S&P 500 index futures were flat and the dollar was stable at its week-to-date high.

Rob Carnell, Asia economist at ING multinational financial group, said that there is still a way to achieve a new stimulus package, but must wait after the US election in November, because both Republican and Democratic presidential candidates both promise this stimulus package.

The Chinese stock, bond and currency markets continued to close for the holiday until October 9.

The suspension of negotiations on the US stimulus package led to concerns about the recovery of the world economy to the impact of Covid-19.

Meanwhile, the US job market shows signs of slowing down when recruitment activities are declining. Fed Chairman Jerome Powell warns the risks will come if the authorities give too few policies to support the economic recovery. The risks from aggressive policies now appear to be less, said Mr Powell, “even if the policy moves are deemed overkill than necessary, they will not become in vain”.

After a few weeks of recovery due to the expectation that a new stimulus package will be approved soon, tThe US stock market last night lost its momentum. The Dow Jones industrial average lost 1.3% while the S&P 500 and Nasdaq Composite slipped 1.4 and 1.6 percent deeper, respectively.

Oil prices went down this morning after information about US crude reserves increased beyond forecast. WTI oil futures prices slid about 2% to $ 39.91 / barrel, while Brent futures prices fell 1.5% to $ 42.01 / barrel.

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