SHANGHAI- Asian shares wavered on Thursday as investors weighed hopes for more stimulus to support pandemic-stricken economies against a dramatic rise in tensions between the United States and China.
European equities were set for gains, with pan-region Euro Stoxx 50 futures up 0.36 percent, German DAX futures up 0.27 percent and FTSE futures up 0.11 percent in early deals.
S&P mini-futures added 0.09 percent.
Washington’s order to Beijing to close its consulate in Houston, Texas amid accusations of spying had weighed on risk sentiment earlier in Asia, pulling shares lower.
China said the order was an “unprecedented escalation” by Washington, and a source said Beijing was considering shutting the US consulate in Wuhan in retaliation.
US President Donald Trump said that other consulate closures were “always possible”.
But by afternoon in Asia, MSCI broadest index of Asian shares ex-Japan was 0.18 percent higher as Chinese shares pared losses. The Shanghai benchmark was off 0.6 percent after earlier falling more than 2 percent.
Australian shares regained their footing to rise 0.25 percent and Hong Kong’s Hang Seng index was 0.43 percent higher.
Nikkei futures eked out a 0.09 percent gain to 22,805, with Japanese markets closed for a holiday.
Unprecedented stimulus measures to boost battered economies would continue to provide structural support for riskier assets, said Kay Van-Petersen, global macro strategist at Saxo Capital Markets in Singapore.
“The forces of liquidity are just unparalleled … we’re seeing what happened post the GFC, but we’re seeing it on steroids,” he said.
“It’s rare that you see both monetary and fiscal policy turned on, and then when they are they only turn on for a little bit.” — Reuters
