By Gina Lee
Investing.com – Asian stocks were mostly down on Thursday morning, halting an earlier rally as investors digest mixed U.S. economic data as well as a stall in negotiations for the latest stimulus package.
Japan’s Nikkei 225 was down 0.47% by 10:56 PM ET (3:56 AM GMT) while South Korea’s KOSPI gained 0.69%
Down Under, the ASX 200 was up 0.27%. Australia continues its battle against COVID-19, with government modeling reportedly suggesting that the number of cases in Victoria state could peak at more than 1,000 cases per day.
Hong Kong’s Hang Seng Index fell 1.64%. China’s Shanghai Composite was down 1.06% and theShenzhen Component fell 0.95%.
Asia benefitted from a boost in U.S. markets after Johnson&Johnson (NYSE:JNJ) announced on Wednesday a $1 billion deal to develop 100 million doses of its potential COVID-19 vaccine for the U.S.
The U.S. reported on the same day an Institute of Supply Management (ISM) Non-Manufacturing Purchasing Managers' Index (PMI) of 58.1 for July, which beat June’s reading of 57.1.
But sentiment soured as the same survey also indicated decreased levels of hiring, and the ADP Nonfarm Employment record released on the same day indicated increasing unemployment with a sharp decrease in payrolls growth in July.
Investors are now looking to the latest unemployment benefits figures, due to be released later in the day.
Meanwhile, there is increasing doubt as to whether the U.S. Congress will meet its end-of-the week deadline to reach consensus on the latest stimulus measures. Republicans and Democrats are hardening their stances, but U.S. President Donald Trump has vowed to take executive action if no significant progress has been made by Friday.
Some investors struck a cautionary note over over-reliance on positive news.
“There are some risks of the market relying too heavily on positive news around the fiscal stimulus and an earnings season that still wasn’t that great, even if many companies did beat,” Kerry Craig, global market strategist at JPMorgan (NYSE:JPM) Asset Management, told Bloomberg.
“There’s a case for markets, in the U.S. particularly, taking a pause from here on out rather than continuing this rally, given how strong it has been.”
Meanwhile, the war against the incessantly rising number of COVID-19 cases continues. There are more than 18.7 million cases globally as of August 6, according to Johns Hopkins University data.