Asian shares skid despite US economic stimulus deal

Shares started the week out on a sour note in Asia as worsening coronavirus outbreaks overshadowed news that U.S. lawmakers finally have a deal on more support for American families and businesses.

Markets fell in Japan, Hong Kong and South Korea on Monday but rose in Shanghai.

Passage of the nearly $1 trillion COVID-19 economic relief package was expected later Monday. However, a resurgence of virus outbreaks around the globe has dented optimism that vaccines can bring a swift end to the pandemic.

Most investors had already factored in expectations for the fresh stimulus, Jingyi Pan of IG said in a commentary.

“The tentative accord on the approximate $900 billion coronavirus stimulus deal, having been the talk of the town for weeks, brought forth little fresh enthusiasm for markets,” Pan said.

In Asia, new COVID-19 outbreaks have led authorities to impose lockdowns or other restrictions in Australia and Thailand. In Japan, the government has suspended a travel promotion program and advised restaurants and bars to close early.

Meanwhile, in Britain the spread of an especially contagious form of the coronavirus has brought fresh limits on business and other activity. Other European governments are likewise stepping up measures to contain a resurgence of the pandemic.

Tokyo’s Nikkei 225 index lost 0.6% to 26,613.05 while in Hong Kong the Hang Seng declined 0.5% to 26,368.23. South Korea’s Kospi declined 0.6% to 2,755.37 and in Australia, the S&P/ASX 200 shed 0.5% to 6,643.60.

The Shanghai Composite index gained 0.3% to 3,406.04. Shares rose in Taiwan but fell in Singapore.

The U.S. stimulus agreement is to establish temporary $300 per week supplemental jobless benefits and $600 direct stimulus payments to most Americans, along with a fresh round of subsidies for hard-hit businesses and funding for schools, health care providers, and renters facing eviction.

The final agreement was reached after a breakthrough over Federal Reserve emergency powers was resolved by the Senate’s top Democrat and a senior conservative Republican.

Wall Street retreated on Friday as investors waited to see if Congress would deliver on its promises of more cash for struggling workers and businesses.

The S&P 500 fell 0.4%, a day after it and other major indexes returned to record heights. The decline snapped a three-day winning streak for the benchmark index, but it still notched a 1.3% weekly gain that more than made up its prior week’s loss.

 

Source: Apnews