Asian shares hit by surging coronavirus circumstances, U.S. stimulus woes

© Reuters. Photographers take photos near a large screen showing stock prices at the Tokyo Stock Exchange after market opens in Tokyo

By Kane Wu and Pete Schroeder

(Reuters) – Asian stocks markets fell on Tuesday as soaring global coronavirus cases and slow progress on a U.S. stimulus deal hammered investor sentiment and took a toll on Wall Street.

MSCI’s gauge of Asia Pacific stocks outside Japan was down 0.43%, with Australia’s off 1.1% to an almost three-week low.

China’s CSI300 Index edged down 0.1%, as investors looked out for any news from a meeting of China’s Communist Party leaders to set the next five-year plan.

Data out earlier in the day also showed China’s industrial profits grew at a slower pace in September, suggesting a recovery in the manufacturing sector is yet to be bedded-in.

In Japan, the benchmark dropped 0.28% in morning trade while Hong Kong’s was down 1.02%.

U.S. indices fell sharply overnight to open the week’s trading, as anxiety over new record daily COVID-19 cases in the United States, Russia and France weighed on investor appetite.

Adding to the gloom, White House economic adviser Larry Kudlow told reporters on Monday that talks over a coronavirus relief package have slowed, though House Speaker Nancy Pelosi remained hopeful an agreement can be reached before the Nov. 3 elections.

Many Senate Republicans have resisted legislation of a scope that Pelosi and Mnuchin have discussed, totaling around $2 trillion.

“The challenge for markets is that in most cases they are already pricing a very strong economic bounce. The new outbreaks, and the potential for a double-dip recession, directly contradict this assumption,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

National polls give Democrat Joe Biden a solid lead over president Donald Trump but the contest is much tighter in battleground states that could decide the outcome.

The sharp stock market decline set a bleak tone ahead of a busy third-quarter earnings season, with large U.S. tech firms like Apple Inc (NASDAQ:), Amazon.com Inc (NASDAQ:) and Google-parent Alphabet (NASDAQ:) Inc set to report. Microsoft Corp (NASDAQ:) reports its results Tuesday.

The fell 2.29% overnight, the S&P 500 lost 1.86%, while the dropped 1.64%.

The dollar was holding largely steady, moving just a touch lower to trade at 92.951 against a basket of six major currencies.

Much of the trading in currency markets, as well as other asset markets, was buffeted by the renewed coronavirus fears.

In early Asia, oil prices managed to staunch an extended sell-off though the outlook was weak due to the virus-induced worries over demand. was up 12 cents, or 0.3%, at $40.58 a barrel by 0039 GMT, having dropped more than 3% overnight. U.S. oil was up 13 cents, or 03%, at $38.69 a barrel, after also declining more than 3% on Monday.

The safe-haven added 0.3% to $1,907.41 an ounce Tuesday morning.

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