Asia Markets wrap
Asia Markets wrap

Hong Kong: Financial markets bounced back from early lows struck after US President Donald Trump abruptly called off talks on a further relief plan until after the elections as investors expressed disbelief that this was the end-game for stimulus.

But even as Donald Trump said in a tweet he was ready to support the Paycheck Protection Program and urged Congress to provide a $25-billion bailout for US airlines, there seems to be hesitancy that a bumper relief package is in the pipeline in the near-term. The election outcome would determine the magnitude of the post-election fiscal package.

“Stimulus odds are lower following President Trump’s announcement that talks with Speaker Pelosi have ended,” Goldman Sachs economists said in a note.

“Very limited fiscal measures are possible on a piecemeal basis, like airline aid, but not some of the larger items such as stimulus payments that the President has suggested Congress consider as a standalone policy. More substantial fiscal support is likely post-election and will depend on the election outcome.”

In Asia, Japan’s Nikkei 225 index dipped 0.05% but Australia’s S&P ASX 200 added 1.25% boosted by a A$22 billion budgetary boost and Hong Kong’s Hang Seng index advanced 1.09%, lead by the technology sector rallying ahead of the Ant Group IPO, expected to be the world’s largest IPO.

Morrison splashes the cash DownUnder

After markets shut on Tuesday, Australia announced a budget that would provide fiscal support of around 2.5% of GDP in 2021/22.

“The budget has provided a combination of income support with return to work policies. The income emergency measures implemented in March 2020 will remain in place until March 2021, though these have already been lowered from October,” BofA Securities analysts said in a note, while adding that aim was to boost household income through fast tracking the tax reform that kicked off in the previous budget, likely to add around $12 billion to household income throughout the 2021 financial year.

“These policies have proved effective as we have seen household income rising sharply in 2Q GDP.”

Meanwhile, the US dollar weakened slightly to 93.68 against a basket of currencies and that provided a boost to gold which rose 0.4% to $1,885 per ounce. US Treasuries fell with the benchmark 10-year yield rising 4 basis points to 0.77% ahead of a $35-billion issuance scheduled for later in the day.

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Asia Markets

· Japan’s Nikkei 225 index dipped 0.05%

· Australia’s S&P ASX 200 added 1.25% 

· Hong Kong’s Hang Seng index advanced 1.09%

· The MSCI Asia Pacific index inched down 0.04%.

Stock of the day

Property developer Greentown China rose as much as 14.9% after it said its sales rose 30.4% in the nine months to September.

This report appeared first on Asia Times Financial.

Umesh Desai

Umesh Desai is Asia Times Finance Editor. Prior to his current role he was at Reuters for 19 years before which he was a credit ratings and equity research analyst. A chartered accountant by training, he is based in Hong Kong.