AFP/ Hong Kong
Stock markets mostly rose yesterday but gains were limited as US lawmakers struggled to hammer out a fresh economic rescue package, while investors were largely unmoved by the last presidential debate before next month’s election.
Equities have swung back and forth over the past week as the will-they-won’t-they saga of the stimulus discussions keeps traders on their toes, though observers believe a bill is increasingly unlikely to be passed before the November 3 vote.
House Speaker Nancy Pelosi said both parties “continue to be engaged in negotiations, and I am hopeful we will be able to reach an agreement” but she warned that opposition to a massive spending plan from Senate Republicans posed a huge hurdle.
“Both sides remain at the stimulus negotiating table as neither benefits from pulling away,” said Axi strategist Stephen Innes.
But he said Republicans were “unwilling to compromise on the thorniest issues of financial aid to states and liability protections, and Pelosi is unlikely to hand (Donald) Trump a victory this late in the game.
“So, unless a surprise occurs before Friday sundown at the Last Chance Saloon, neither side may be negotiating in good faith.”
With talks still grinding along on Capitol Hill, focus was the stand-off between Donald Trump and Joe Biden, with analysts saying the president needed a big win to overturn his Democratic challenger’s lead in national and crucial state polls. Innes added: “The...debate was less chaotic than the first but offered little new information to inform the result for markets.Meanwhile, discussion relevant to the post-election economic outlook was limited, particularly from President Trump.”
Bets on a Biden win and a Democratic sweep of both houses of Congress have risen recently, with the general consensus being that such an outcome would see the passage of an even bigger stimulus than the one of around $2tn being discussed now.
Tokyo, Hong Kong, Mumbai, Seoul, Singapore, Wellington and Jakarta all rose with Manila surging more than 2% as the Philippine capital eases lockdown measures.
But Shanghai, Sydney and Taipei fell. London and Paris each rose more than 1% and Frankfurt added almost as much.
The need for a spending bill was highlighted once again Thursday by the release of data showing 787,000 Americans had signed on for jobless benefits last week, a drop from the previous week and better than expected but still a massive number.
While fresh stimulus would be welcomed, a surge in new coronavirus cases across the US and Europe is fuelling concerns that the already stuttering economic recovery could be knocked off course.
A second wave with record new cases has already forced major economies including Britain, France and Germany to impose partial lockdown measures, leading businesses to warn of massive job losses.
In Tokyo, the Nikkei 225 closed up 0.2% to 23,516.59 points; Hong Kong – Hang Seng ended up 0.5% to 24,918.78 points and Shanghai – Composite closed down 1.0% to 3,278.00 points yesterday.
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