Global stocks follow Wall St. lower on lack of US aid plan
Beijing, Oct 22 (AP/PTI): Global stocks and U.S. futures declined Thursday as investors watched Washington for signs of whether political leaders can agree on an economic aid plan in the two weeks before the November 3 presidential election.
London and Frankfurt opened lower while Shanghai, Tokyo and Seoul retreated.
On Wall Street, the benchmark S&P 500 index lost 0.2% on Wednesday as U.S. political leaders wrangled over economic aid following the expiration of extra unemployment benefits that propped up consumer spending. Democrats are pressing President Donald Trump’s Republicans to expand a proposed package.
The speaker of the House of Representatives, Nancy Pelosi, said she made progress in talks with the White House. But a potential agreement might face opposition in the Senate, where Majority Leader Mitch McConnell told fellow Republicans he warned the White House not to seal a relief deal before the election.
Fiscal stimulus deal optimism has faded, said Mizuho Bank in a report.
In early trading, the FTSE 100 in London lost 0.3% to 5,756.05 and Frankfurt’s DAX lost 0.7% to 12,465.31. The CAC 40 in Paris retreated 0.6% to 4,824.66.
On Wall Street, futures for the S&P 500 and the Dow Jones Industrial Average were down 0.3%.
In Asia, the Shanghai Composite Index lost 0.4% to 3,312.50 while the Nikkei 225 in Tokyo sank 0.7% to 23,474.27.
The Hang Seng in Hong Kong ended up 0.1% at 24,786.13 after spending most of the day in negative territory.
The Kospi in Seoul retreated 0.7% to 2,355.05 and Sydney’s S&P-ASX 200 declined 0.3% to 6,173.80.
India’s Sensex lost 0.6% to 40,477.05. New Zealand and Jakarta also retreated while Singapore and Bangkok advanced.
Markets are swinging between optimism about possible development of a coronavirus vaccine and uncertainty about the U.S. economic outlook without an aid package.
On Wednesday, the Dow lost 0.4% while Nasdaq composite gave up 0.3%.
Industrial and health care stocks declined. Communications services gained. Social media stocks rose after the photo service Snap reported bigger gains in revenue and users than expected.
Google’s parent company rose 2.3%, adding to its gains from a day before when the Justice Department sued it for antitrust violations. Investors had already been expecting such action, and analysts said Google’s counterarguments mean it will likely take years to reach a resolution.
In energy markets, benchmark U.S. crude gained 18 cents to 40.21 per barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract fell 1.67 cents to 40.03 a barrel Wednesday. Brent crude, the price standard for international oils, added 16 cents to 41.89 per barrel in London. The contract declined 1.43 the previous session to 41.73 a barrel.
The dollar gained to 104.68 Japanese yen from Wednesday’s 104.55 yen. The euro declined to 1.1846 from 1.1862.