(Corrects early market report filed at approx 0240 GMT to
change quote attribution in paragraph four to Carlos Casanova)
By Andrew Galbraith and Jessica DiNapoli
SHANGHAI/NEW YORK, Oct 22 (Reuters) - Asian shares fell on
Thursday and U.S. Treasury yields ticked lower as investors
fretted over the slow pace of U.S. 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 U.S. 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 U.S. 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% of GDP, and 2.2 trillion which is
Speaker Pelosi's package, is even higher at around 10% of GDP,"
said Carlos Casanova, senior economist for Asia 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 .MIAPJ0000PUS was down 0.63%.
Australian shares .AXJO gave up 0.6%, Seoul's Kospi
.KS11 was off 0.59% and and Chinese blue-chips .CSI300
dropped 1.1%.
The Nikkei .N225 was 0.69% 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 U.S. 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 .DJI inched lower by
0.35%, while the S&P 500 .SPX lost 0.22%. The tech-heavy
Nasdaq Composite .IXIC dropped 0.28%.
On Thursday, the dollar was 0.11% higher against the yen at
104.67 JPY= , while the euro EUR= notched down 0.19% to
$1.1839.
But against a basket of major peers, the dollar =USD
appeared relatively unaffected by setbacks to stimulus talks,
trading only slightler higher at 92.784.
"Markets are now pricing in a strong likelihood of a Biden
Presidency perhaps even clean sweep of Congress, and this is
weighing on the USD, as they view a less confrontational trade
environment. They will also probably be factoring in a large
fiscal stimulus early next year, with none of the hold up that
is currently preventing a deal," Rob Carnell, chief economist at
ING in Singapore said in a note.
The yield on benchmark U.S. 10-year Treasury notes
US10YT=RR ticked down to 0.8108% from a U.S. close of 0.816%
on Wednesday.
In commodity markets, oil prices dropped, adding to sharp
losses overnight, after higher U.S. gasoline inventories pointed
to a deteriorating outlook for fuel demand as coronavirus cases
soar. EIA/S
U.S. West Texas Intermediate (WTI) crude CLc1 futures fell
0.6% to $39.79 a barrel and Brent crude LCOc1 futures wer
0.48% lower at $41.358 a barrel.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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