Asian Stocks Down Over New Lockdowns in Europe, U.S. Stimulus Disappointment By Investing.com

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By Gina Lee

Investing.com – Asia Pacific stocks were down on Thursday morning, following European and U.S. shares’ lead as the number of COVID-19 cases continues to rise and fresh lockdowns increased worries about the economic impact. However, Asian shares saw more modest losses compared to the overnight U.S. session.

Japan’s was down 0.72% by 11:02 PM ET (3:02 AM GMT). The Bank of Japan is due to , widely expected to be little changed from the one currently in place.

China’s inched down 0.09% and the Shenzhen Component edged down 0.15%. Plenty of action is due from China, with nearly 1,000 companies due to release third-quarter earnings later in the day. The Chinese Communist Party is also due to release 5-year and 15-year plans mapping the country’s economic path as it concludes its closed-door plenum later in the day.

Hong Kong’s fell 1.38%.

South Korea’s slid 1.77%, with the government leading a push to close clubs in Seoul over the Halloween holiday to curb the spread of the virus. In Australia, the tumble 1.71%.

France and Germany saw fresh lockdowns introduced by French President Emmanuel Macron and German Chancellor Angela Merkel on Wednesday. Investors are looking to the European Central Bank’s lead as it announces its monetary decision later in the day.

With the Nov. 3 U.S. presidential election less than a week away, the conspicuous absence of any economic relief in the short term as Congress failed to pass the latest stimulus measures, alongside the uncertainty surrounding the election, also damped investor risk appetite. The U.S. also saw an increase in the number of COVID-19 cases.

“Risk sentiment took a nosedive on Wednesday amid more concern around the spread of COVID-19 and renewed restrictions in Europe … this was seen alongside ongoing concerns about failure to agree on U.S. fiscal aid before the election next week, adding to a weak economic picture,” ANZ analysts said in a note.

Adding to the gloom was an MSCI gauge of global equities tumbling almost 5% over the past week as the number of COVID-19 cases ticked upwards. Italy, Spain and the U.K. all reported record numbers of cases on Wednesday.

“We’ve got the election hanging over our heads. Then obviously COVID-19 accelerating to the degree that it has both here in the U.S. as well as in Europe … and then you’ve got the lack of stimulus, which in our estimation is still necessary to get us through this period until we get an ultimate medical solution,” State Street (NYSE:) Global Advisors deputy global chief investment officer Lori Heinel told Bloomberg.

Investors now await U.S. data, including the country’s , to be released later in the day. The GDP is forecast to the strongest on record, after seeing a record slump in the second quarter.

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