Major Asian stock markets declined Wednesday amid investor concern about U.S. stimulus spending and a trade agreement with Beijing.
Market benchmarks in Shanghai, Tokyo, Hong Kong and Sydney declined.
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Investors are watching the stalemate among U.S. legislators over employment benefits for millions of Americans thrown out of work by the coronavirus pandemic and spending to shore up anemic economic growth.
At the same time, news reports from Washington said Chinese and American trade envoys will meet this month to review their “Phase 1” agreement aimed at ending a tariff war. That follows President Donald Trump's threat to discard the agreement over Beijing's handling of the coronavirus pandemic.
The price of gold rose again after a deadly explosion in Beirut. The precious metal has hit a string of record highs, rising $12.20 to $2,033.20 per ounce.
The explosion killed at least 70 people, injured more than 3,000 and flattened much of the Lebanese capital’s port. The cause of the most destructive blast in the country’s history was unclear.
Investors have been buying gold and silver, usually seen as a store of value if stock prices decline. Forecasters see that as an indicator of rising unease about the global economic outlook.
Wednesday's trading in Asia was lackluster, “with the mood darkening on both the U.S. aid package and geopolitics fronts,” said Jingyi Pan of IG in a report.
The Shanghai Composite Index lost 0.5% to 3,354.92 and the Nikkei 225 in Tokyo sank 0.7% to 22,426.91. Hong Kong's Hang Seng was off less than 0.1% at 24,934.14.
The S&P-ASX 200 in Sydney fell 0.9% to 5,981.50 while Seoul's Kospi gained 0.7% to 2,296.98. New Zealand and Jakarta retreated while Singapore gained.
Overnight on Wall Street, the benchmark S&P 500 index gained 0.4% to 3,306.51 as a rally eased. The index is within 2.4% of its February record high.
The Dow Jones Industrial Average climbed 0.6% to 26,828.47. The Nasdaq composite added 0.4% to a record 10,941.17.
Global markets have recovered most of this year's losses as investors look ahead to the possible development of a coronavirus vaccine. Forecasters warn the rebound might be too big and fast to be sustained by uncertain economic activity as infections rise in the United States and some other countries.
Legislators in Washington have failed to agree on a relief package including a replacement for $600 weekly unemployment benefits that expired last week.
The number of people filing for unemployment is rising after a resurgence of infections pushed some states to reimpose controls on business.
Economists expect a report Friday to show U.S. employers added 1.8 million jobs last month, which would be welcome growth but also a slowdown from June.
For now, investors are relying on the Federal Reserve, which said last week it would keep interest rates near zero. At the same time, Fed Chairman Jerome Powell said Congress needs to take action.
“Markets are betting on the Fed picking up the slack more permanently even from temporary fiscal stimulus lapses and convulsions,” Hayaki Narita of Mizuho Bank said in a report.
In energy markets, benchmark U.S. crude lost 8 cents to $41.62 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 69 cents on Tuesday to settle at $41.70 per barrel. Brent crude, the basis for pricing international oils, shed 4 cents to $44.39 per barrel in London. It gained 28 cents the previous session to $44.43.
The dollar declined to 105.57 Japanese yen from Tuesday's 105.72 yen. The euro gained to $1.1819 from $1.1805.