coronavirus pandemic

Asian Stocks Follow Wall St Lower as Stimulus Hopes Fade

Because of their massive size, the movements of Big Tech stocks have an outsized effect on the S&P 500 and other indexes

New York Stock Exchange Building and Wall Street Sign
William Manning/Getty Images

Asian stocks followed Wall Street lower on Thursday as hopes U.S. leaders will agree on a new economic stimulus before the Nov. 3 presidential election faded.

Benchmarks in Shanghai, Tokyo and Hong Kong declined. Sydney advanced.

In Seoul, the company that manages boy band BTS made its market debut amid criticism by Chinese internet users after the group’s leader thanked Korean War veterans for their sacrifices. Big Hit Entertainment Ltd.’s share price more than doubled by mid-morning. But Seoul's Kospi still fell 1%, to 2,346.45.

Wall Street's benchmark S&P 500 index closed down 0.7% on Wednesday after Treasury Secretary Steven Mnuchin said he and congressional leaders were “far apart” on new aid for the struggling U.S. economy. Consumer spending, the main U.S. economic engine, weakened after earlier additional unemployment benefits expired.

Mnuchin “added another nail to the coffin on pre-election stimulus,” Jingyi Pan of IG said in a report.

The Shanghai Composite Index lost 0.1% to 3,337.51 and the Nikkei 225 in Tokyo fell 0.5% to 23,517.63. The Hang Seng in Hong Kong lost 1.2% to 24,370.76.

The S&P-ASX 200 in Sydney gained 0.8% to 6,230.10. New Zealand, Singapore and Jakarta also retreated.

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Thailand's benchmark lost 1% after the government declared a “severe state of emergency" following a rally Wednesday of thousands of protesters demanding democratic change, the third major gathering by activists.

Thai police dispersed a group of pro-democracy protesters early Thursday who had camped out overnight outside the office of the prime minister to demand his resignation. Police said they had arrested 20 people.

Mnuchin and Nancy Pelosi, the speaker of the House of Representatives, talked by phone Wednesday but reached no agreement, according to Pelosi aide Drew Hammill. Mnuchin said it would be difficult to complete an agreement before next month's presidential election.

On Wall Street, companies that rely on consumer spending, banks and technology and communication stocks bore the brunt of the selling.

The S&P 500 fell to 3,488.67. The Dow Jones Industrial Average lost 0.6% to 28,514. The Nasdaq composite slid 0.8% to 11,768.73.

Investors are swinging between optimism about a possible coronavirus vaccine that helped to propel an earlier market rally and unease about lackluster U.S. economic activity.

Major U.S. companies have begun reporting quarterly earnings this week.

Bank of America sank 5.3% after its revenue fell short of analysts’ forecast. Wells Fargo dropped 6% after its earnings were lower than Wall Street expected.

The Federal Reserve has indicated that it will keep interest rates at nearly zero for a while to support the economy, even if inflation hits its target level.

In energy markets, benchmark U.S. crude gained 7 cents to $41.11 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, added 6 cents to $43.38 per barrel in London.

The dollar gained to 105.26 yen from Wednesday's 105.15 yen. The euro declined to $1.1750 from $1.1753.

Copyright AP - Associated Press
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