Asian shares slip as surging coronavirus cases weigh on global economy

By Kane Wu
(Reuters) - Asian stocks fell Tuesday as investors disappointed with rising coronavirus cases around the world, which dampened recovery prospects and slowed progress on a US economic agreement.
However, US stocks should rebound from Wall Street's worst day in a month, with e-mini futures for the S&P 500 up 0.23%. London's FTSE futures were up 0.02%.
The MSCI reading for stocks in Asia Pacific outside Japan fell 0.43%, while the Australian ASX 200 closed 1.7% in its worst session in a month.
China's CSI300 index cut losses this morning as investors looked for news of a meeting of Chinese Communist Party leaders to set the next five-year plan.
"Two events in the next few days will affect the political outlook for the world's two largest economies: China's 14th Five-Year Plan and the US elections," said Tai Hui, chief strategist for Asia at J.P. Morgan Asset Management.
"The recent surge in infections in the US and Europe is also hurting market sentiment."
Rising cases of coronavirus around the world are forcing some countries to impose new restrictions and risk damaging the global economic recovery.
Earlier data also showed that China's industrial profits grew more slowly in September, suggesting that the world's second largest economy in manufacturing has not yet solidified.
In Japan, the benchmark Nikkei 225 index fell 0.11%, while the Hang Seng index in Hong Kong fell 0.76%.
China's Ant Group will close the institutional books building in Hong Kong a day ahead of schedule to raise around $ 17.2 billion in the city, Reuters reported Tuesday. The group, which is controlled by Alibaba founder Jack Ma, is set to raise up to $ 34.4 billion in a double listing in the world's largest IPO in Hong Kong and Shanghai.
U.S. indices fell sharply overnight as the number of coronavirus cases and the political deadlock in negotiations for more economic aid doubled.
White House economic adviser Larry Kudlow told reporters Monday that talks on a coronavirus bailout had slowed, although House spokeswoman Nancy Pelosi remained confident that an agreement could be reached ahead of the November 3 elections can be achieved.
"The challenge for the markets is that in most cases they are already calculating a very strong economic upswing. The new outbreaks and the potential for a double-dip recession directly contradict this assumption," said 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 competition is much tighter in battlefield states that could decide the outcome.
The sharp decline in the stock markets was a grim tone ahead of a busy third quarter earnings season that will see big US tech companies like Apple Inc, Amazon.com Inc and Google parent Alphabet Inc reporting. Microsoft Corp will report its results on Tuesday.
The dollar fell 0.153% during the Asia day to trade at 92.932 against a basket of six major currencies.
Much trading in the foreign exchange markets, as well as other asset markets, has been hampered by renewed coronavirus fears.
Oil prices rose modestly on Tuesday after the recent heavy losses, but sentiment remained subdued as rising global coronavirus cases hurt prospects for crude oil demand while supply rose. Brent crude rose 35 cents, or 0.87%, to $ 40.81 a barrel after falling more than 3% overnight. U.S. oil rose 30 cents, or 0.78%, to $ 38.86 a barrel after also falling more than 3% on Monday.
The Spot Gold Safe Haven rose 0.32% to USD 1,907.64 an ounce.

(Reporting by Kane Wu in Hong Kong; Additional reporting by Pete Schroeder in New York; Editing by Richard Pullin, Shri Navaratnam and Ana Nicolaci da Costa)

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