SHANGHAI/NEW YORK- Asian shares fell on Thursday and US Treasury yields ticked lower as investors fretted over the slow pace of US stimulus talks and a surge in global cases of COVID-19.
Global investor sentiment took a fresh hit over talks to boost the world’s largest economy after US President Donald Trump on Wednesday accused Democrats of being unwilling to craft an acceptable compromise on stimulus, following reports of progress earlier in the day.
It remains unclear whether stimulus negotiations would continue ahead of the US presidential and congressional elections on Nov. 3.
“We still think that this deal will remain elusive in the sense that this amount that we are talking about, $1.88 trillion, that’s about 9 percent of GDP, and 2.2 trillion which is Speaker Pelosi’s package, is even higher at around 10 percent of GDP,” said Anthony Chan, chief Asia investment strategist at Union Bancaire Privee (UBP) in Hong Kong.
“Even if both sides do manage to reach an agreement, given the tight deadline ahead of the election it’s unlikely that something like that would be able to go through the Senate smoothly.”
In morning trade, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.63 percent.
Australian shares gave up 0.6 percent, Seoul’s Kospi was off 0.59 percent and and Chinese blue-chips dropped 1.1 percent.
The Nikkei was 0.69 percent lower.
Uncertainty over the passage of a bill to stimulate a pandemic-ravaged economy comes as the United States faces a new wave of COVID-19 cases.
Nearly two-thirds of US states were in a danger zone of coronavirus spread and six, including election battleground Wisconsin, reported a record one-day increase in COVID-19 deaths on Wednesday.
Against the backdrop of stimulus talks and the spread of the novel coronavirus, Wall Street’s three major averages closed lower on Wednesday after a choppy trading session.
The Dow Jones Industrial Average inched lower by 0.35 percent, while the S&P 500 lost 0.22 percent. The tech-heavy Nasdaq Composite dropped 0.28 percent.