Asia report: Markets finish higher even as Trump shoots down stimulus

Markets in Asia closed in positive territory on Wednesday, as investors continued to monitor the new strain of Covid-19 identified in the UK, and Donald Trump poured cold water on the coronavirus stimulus package passed by Congress earlier in the week.

In Japan, the Nikkei 225 was up 0.33% at 26,524.79, as the yen strengthened 0.21% against the dollar to last trade at JPY 103.42.

Automation specialist Fanuc managed gains of 0.69%, while among the benchmark’s other major components, fashion firm Fast Retailing was down 0.12% and technology conglomerate SoftBank Group was off 2.56%.

The broader Topix index was 0.23% firmer by the end of trading in Tokyo, closing at 1,765.21.

Investors in the country spent much of the day poring over the October monetary policy meeting minutes from the Bank of Japan.

One central bank member was concerned that deflation could “take hold” as the result of a fresh spread of Covid-19 putting a new dampener on economic activity.

On the mainland, the Shanghai Composite was ahead 0.76% at 3,382.32, and the smaller, technology-heavy Shenzhen Composite was 0.74% higher at 2,281.24.

South Korea’s Kospi was 0.96% higher at 2,759.82, while the Hang Seng Index in Hong Kong added 0.86% to 26,343.10.

The blue-chip technology stocks were higher in Seoul, with Samsung Electronics up 2.21% and SK Hynix rising 3.11%.

LG Electronics, meanwhile, rocketed 29.61% after it announced a new joint venture with Canadian automotive supplier Magna International, for the production of electric vehicle parts.

The long-awaited $900bn Covid-19 relief package, passed by the US Congress earlier in the week, hit a fresh stumbling block on Wednesday, as the US president described the bill as a “disgrace”.

He reportedly believed the $600-per-adult stimulus payment in the package should be closer to $2,000, asking lawmakers to send him a more palatable bill, “or else the next administration will have to deliver a Covid relief package”.

“After much back and forth, the House of Representatives and the Senate backed a $900bn coronavirus stimulus package,” commented CMC Markets analyst David Madden.

“The move should help the US continue with its economic rebound but the announcement had a muted reaction, probably because the deal was considered to be a foregone conclusion.

“At the back end of last week, the S&P 500 and the Nasdaq 100 hit new intraday record highs, so the scheme was probably factored into the markets.”

Madden said that overnight, however, president Trump expressed his dissatisfaction with the package, leading to concerns he would not sign it off.

“US index futures came under pressure on the back of the news but they have since recovered.”

Across the pond, a new strain of Covid-19 discovered in the UK was continuing to cause consternation, as the French and British authorities reached an agreement to end the cross-channel blockade of both passengers and accompanied freight.

Oil prices were higher at the end of the Asian day, with Brent crude last up 0.24% at $50.20 per barrel, and West Texas Intermediate rising 0.21% to $47.12.

In Australia, the S&P/ASX 200 gained 0.66% to 6,643.10, while across the Tasman Sea, New Zealand’s S&P/NZX 50 advanced 1.38% to 13,020.21.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.65% at AUD 1.3209, and the Kiwi advancing 0.65% to NZD 1.4109.