Tue Oct 27, 2020 – 11:28 AM
[HONG KONG] Asian markets fell on Tuesday following a massive sell-off in New York and Europe, fueled by fears that a resurgence of the coronavirus could force new economically painful containment measures.
Traders have also given up almost all hope that a new US stimulus package will be passed ahead of next Tuesday’s election, with Democrats and Republicans blaming each other, though a new deal is still expected. be concluded thereafter.
The need for a costly bailout for hard-hit Americans is underscored by a surge in new infections across the country which observers say will deal a heavy blow to an already fragile economic recovery.
This week’s data is expected to show record third quarter growth in the United States thanks to a multibillion-dollar stimulus agreed to earlier this year alongside huge support from the Federal Reserve.
However, this follows a record contraction in the second quarter, as economists pushed the economy to contract this year.
“The spread of the second and third waves of Covid-19 may be triggering a point of no return for some industries as the economic damage is almost irreversible,” Axi strategist Stephen said Innes. “The downward spiral induced by Covid-19 continues to accelerate.”
With an eye on next week’s vote, he added: “We should expect price action to remain volatile in the days to come as investors are very reluctant to take significant risk ahead of what promises. to be a week or two of headlines.
STIMULATES ‘URGENT NEEDED’
David Kelly, of JPMorgan Asset Management, added: “A stunt bill in the lame session is urgently needed and could be complemented with more comprehensive measure when the new Congress meets in early 2021.”
On Wall Street, the Dow Jones suffered its worst day since early September, losing more than 2% while the S&P 500 and Nasdaq also suffered heavy losses. It came after Frankfurt was hammered by more than three percent, with Paris and London losing more than one percent.
And the sale continued in Asia, although retirement was not so painful.
Tokyo and Shanghai were down 0.3 percent, as were Taipei and Singapore. Hong Kong fell 0.4 percent, while Sydney, Wellington and Manila were all down more than one percent.
Seoul edged up, however, after data showed South Korea’s economy grew more than expected in the third quarter thanks to a surge in exports.
“The flow of information on the Covid case has clearly resonated,” Chris Weston, head of research at Pepperstone, said in a note.
“The reflation trade that worked so well has partly unfolded – not because of the election price review, but because of the new wave of Covid cases.”
Chinese electronic payments giant Ant Group was planning to stop taking orders for the Hong Kong section of its US $ 34 billion mega-IPO due to its massive underwriting, Bloomberg News reported.
The dual listing in Hong Kong and Shanghai is considered the largest in history and would value the company at around US $ 315 billion, more than the financial titans of Wall Street, Goldman Sachs and JPMorgan Chase. Its shares are set to debut on November 5.