Hong Kong: Financial markets remain subdued as the resurgent pandemic snuffed out optimism about a quick recovery with infections soaring in the United Kingdom, Belgium and Italy.
Investors are also awaiting comments from Federal Reserve Chair Jerome Powell and Secretary of the Treasury Steven Mnuchin appearing before the Senate banking committee. Federal Reserve officials in the past 24-hours have warned that more fiscal stimulus is needed to sustain the economic recovery.
Investor focus will also be on US jobless claims – the Labor Department is expected to unveil a decline in claims for unemployment benefits with the reading showing the lowest level since mid-March.
Australia’s ASX 200 slipped 0.81%, Japan’s Nikkei 225 slipped 1.11% and Hong Kong’s Hang Seng benchmark was down 1.82%. But the regional underperformer was mainland China’s CSI 300 index with a drop of 1.92% as tensions with the United States intensified.
And the US dollar continued its surge, staying above 94 against a basket of currencies, a two-month high, as markets returned to this safe haven, moving away from gold, which was marginally weaker at $1,859 per ounce.
“Third-quarter growth will likely be stronger in the countries hardest hit by the lockdowns earlier this year, but worries about a double-dip recession, thanks to higher trending Covid infections, should be a large warning sign against complacency for policymakers,” ING Bank economists Bert Colijn and Carsten Brzeski warned in a note.
Darker economic forecasts were made by Geoffrey Okamoto, the No. 2 official at the International Monetary Fund, who told an online conference that the coronavirus crisis is lasting longer than expected and it will take some countries years to return to growth.
ATF China Bond 50 Index: China bonds slide as Fed stokes risk appetite
Also on Asia Times Financial
· Japan’s Nikkei 225 index retreated 1.11%
· Australia’s S&P ASX 200 slid 0.81%
· Hong Kong’s Hang Seng Index fell 1.82%
· China’s CSI300 tumbled 1.92%
· The MSCI Asia Pacific index slumped 1.27%.
Stock of the day
Brilliance Group surged as much as 11.3% after a report that state investors want to privatise the partner of BMW China. The privatisation would attract other Chinese state-backed investors and could kick off as soon as the fourth quarter of the year, two of the sources said.
This report appeared first on Asia Times Financial.