· Stocks take a breather as Brexit, U.S. stimulus talks stall
Asian equities eased from record highs on Thursday as stalled U.S. stimulus talks and a sell-off in tech stocks weighed, while sterling traders sat on a knife’s edge as last-ditch Brexit negotiations yielded only an agreement to keep talking.
MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.34%. Japan’s Nikkei erased early losses to trade 0.1% lower. Both are up more than 60% from March lows. S&P 500 futures meanwhile pared early gains and steadied in Asian afternoon trade.
The Nikkei 225 in Japan fell 0.23% to 26,756.24 while the Topix index dropped 0.18% to 1,776.21. South Korea’s Kospi index fell 0.33% to 2,746.46.
In Australia, the benchmark ASX 200 declined 0.67% to 6,683.10, with all sectors finishing in the red. The energy subindex dropped 0.37% as oil stocks struggled for gains.
U.S. Treasuries rose while the dollar slightly eased after a volatile overnight session in currency markets, with traders now looking ahead to a European Central Bank monetary policy meeting. Sterling teetered at $1.3366 as it awaits a Brexit resolution.
· China stocks end flat as lending data offsets index exclusion decision
Chinese shares closed flat on Thursday as better-than-expected bank lending data countered a decision by S&P Dow Jones Indices to remove some Chinese companies including Hikvision from its products.
** The blue-chip CSI300 index was unchanged at 4,940.52, while the Shanghai Composite Index ended flat at 3,373.28.
** Consumer and healthcare firms gained, with the CSI300 healthcare index and the CSI300 consumer discretionary index closing up 0.9% and 0.5%, respectively.
· European markets open flat with time running out for Brexit trade deal
European stocks made a muted start on Thursday as markets track the parlous state of Brexit trade deal talks between the U.K. and EU this week.
The pan-European Stoxx 600 hovered around the flatline in early trade, the food and beverage sector edging 0.5% higher while tech stocks fell 0.6%.
U.K. and European lawmakers vowed to decide on a potential post-Brexit trade agreement by the weekend, following an in-person meeting between British Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen on Wednesday evening.
Talks remain at an impasse over several key issues, including fishing rights and competition rules. Downing Street said “very large gaps” remain, while Von der Leyen described the two sides as “far apart.”
EU leaders are gathering in Brussels Thursday for a two-day EU Council meeting.
Markets will also be keeping and eye on the European Central Bank which will publish its latest monetary policy decision and macroeconomic projections on Thursday. The central bank is expected to expand its massive stimulus program as the continent deals with a second wave of the coronavirus pandemic.
Asia-Pacific markets mostly declined Thursday as investors kept an eye on Brexit trade talks as well as ongoing negotiations in the U.S. for a coronavirus relief package.
U.S. stock index futures were slightly higher in overnight trading on Wednesday as investors continued to assess progress on additional stimulus measures, as well as developments on the Covid-19 vaccine front.
During regular trading hours on Wednesday, U.S. stocks rose to record highs. But the gains were ultimately short-lived and the major averages wound up closing in the red; stocks fell after Senate Majority Leader Mitch McConnell told Politico that Republicans and Democrats were “still looking for a way forward” on additional fiscal aid.
On the data front, U.K. GDP grew by 0.4% in October, official figures revealed Thursday, slowing from 1.1% in September.
Reference: Reuters, CNBC
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