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Asian Stocks Continue Losses as COVID-19 Cases Continue to Rise

·3-min read

By Gina Lee

Investing.com – Asia Pacific stocks were mostly down on Wednesday morning. They continued Tuesday’s losses as worries over the economic impact of the ever-rising number of COVID-19 cases continues to dampen investor sentiment.

Japan’s Nikkei 225 was down 0.24% by 11:18 PM ET (3:18 AM GMT). The Bank of Japan will hand down its monetary policy on Thursday, with the European Central Bank also due to announce its policies on the same day.

South Korea’s KOSPI inched down 0.03%. President Jae In Moon declared that COVID-19 has been contained in the country, and was seeking a budget increase to aid the recovery of the COVID-19 battered economy. The Consumer Confidence index increased to 91.6 in October, up from the previous month's 79.4 reading.

In Australia, the ASX 200 was up 0.31%, boosted by the higher-than-expected rise of the country’s Consumer Price Index (CPI). The CPI rose 1.6% quarter-on-quarter during the previous quarter, higher than the 1.5% predicted in forecasts prepared by Investing.com, and remained unchanged at 0.7% year-on-year. The Reserve Bank of Australia is due to meet on Nov. 3, after which it is widely expected to announce lower interest rates and increased government debt purchases.

Hong Kong’s Hang Seng Index fell 0.46%.

China’s Shanghai Composite inched down 0.11%, while the Shenzhen Component inched up 0.03%, reversing some earlier losses. China’s manufacturing and non-manufacturing Purchasing Managers' Indexes could send out mixed signals about the country’s economic recovery from COVID-19. Meanwhile, the Central Committee continues its fifth plenum to map the country’ economic path for the next five years. The plenum will run through Oct. 29.

As the Nov. 3 U.S. presidential election draw closer, the uncertainty over whether Democrat Joe Biden will translate his lead over incumbent president Donald Trump into a victory, and whether Congress will pass the latest stimulus measures, is contributing to continued volatility in the market. U.S. stocks slid after Trump admitted that the measures would likely be passed after the election.

“Markets had a risk-off tone as U.S. consumer confidence data disappointed, COVID-19 cases continue to rise, and the chances of a fiscal deal before the U.S. election faded,” ANZ analysts said in a note.

The surging second wave of COVID-19 cases in Europe and the U.S, as well as the economic impact, also continues to dampen investor sentiment. French president Emmanuel Macron will give a televised address later in the day, where he is expected to announce the re-imposition of a national lockdown starting Thursday. France recorded the highest number of COVID-19 deaths since April and Italy recorded a record number of cases.

“COVID-19 case numbers and hospitalizations continue to rise … these will continue to be closely watched as investors gauge the likelihood of more stringent mitigation measures,” StoneX global market strategist Yousef Abbasi told Bloomberg.

On the data side, the U.S.’ Conference Board (CB) Consumer Confidence index, released on Tuesday, fell to 100.9 in October. The reading was lower than the 102 predicted in forecasts prepared by Investing.com and lower than the previous month’s 101.3 figure. Investors now await further data, including the third-quarter GDP, due to be released on Thursday.

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