TOKYO/BOSTON- Asian stocks dipped on Wednesday on growing uncertainty over whether the US lawmakers would agree on an additional round of big fiscal stimulus to support an economy still struggling with the novel coronavirus.
Hopes of vaccine development, however, prompted some investors to reduce safe-haven assets such as gold and government bonds, and to buy back battered stocks of companies hit hardest by the virus.
The mixed sentiment has led to choppy trade in Asia with the index of ex-Japan Asia-Pacific shares shedding 0.76 percent. while Japan’s Nikkei gained 0.2 percent.
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.
The declines came as political gridlock between the Republican White House and congressional Democrats over coronavirus relief continued for a fourth day, with each party blaming the other for intransigence.
Barring a bipartisan deal, the US economy could be left with measures US President Donald Trump called for on Saturday through executive orders to bypass Congress.
“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 question over whether they are viable, too,” said Junpei Tanaka, strategist at Pictet.
The US election campaigns look set to gather steam after Democratic presidential candidate Joe Biden selected Senator Kamala Harris as his choice for vice president.
E-mini futures for S&P500 were little changed after the news.
The 10-year US Treasuries yield dipped 2 basis points to 0.636 percent in Asia after hitting a one-month of 0.661 percent in previous US trade.