Asian Shares Track Wall Street Fall as Virus Aid Hopes Fade

Stocks had been up in the early going following a report that China’s economy grew at a 5% annual rate in the last quarter

Buildings line Wall Street, Monday, Aug. 31, 2020, in New York.
AP Photo/Mark Lennihan

Asian shares fell moderately Tuesday, tracking Wall Street's overnight decline as hopes faded Washington will come through with badly needed aid for the U.S. economy before the U.S. presidential election.

Investors have been focusing on U.S. economic stimulus amid global uncertainty about the continuing economic fallout from the coronavirus pandemic, which has slammed growth with social distancing restrictions, unemployment, crimped trade, as well as tourism and business closures.

Japan's benchmark Nikkei 225 declined 0.3% to 23,600.98 while South Korea's Kospi slipped 0.2% to 2,341.35. Australia's S&P/ASX 200 fell nearly 0.3% to 6,212.80. Hong Kong's Hang Seng inched down less than 0.1% to 24,533.47, while the Shanghai Composite slipped 0.3% to 3,303.67.

“As hope for a pre-election stimulus balloon deflates, and with stocks struggling to float on their own during a subpar earning season, exhaustion set in, and the laws of gravity took over,” said Stephen Innes, chief global market strategist at Axi.

“And with no shortage of uncertainly overshadowing the markets, investors continue to tack cautiously ahead of the final presidential debate,” Innes said in a report.

Market players are looking for additional data on China's recovery, as that could drive the sorely needed growth in the rest of Asia. Recent data out of Japan show exports to China have been recovering gradually.

On Wall Street, the S&P 500 dropped 1.6%, its worst day in more than three weeks. Wall Street is expecting lawmakers will agree on new stimulus measures for the economy, but the odds of that happening before Nov. 3 Election Day have dimmed.

The S&P 500 fell 56.89 points to 3,426.92. The Dow Jones Industrial Average of big blue chips dropped 1.4% to 28,195.42. The Nasdaq composite extended its losing streak to a fifth day, losing 1.7% to 11,478.88.

Small company stocks also fell. The Russell 2000 gave up 1.2% to 1,613.63. The index has gained 7% so far this month, outpacing the 1.9% gain for the broader S&P 500.

Stocks have been mostly pushing higher this month after giving back some of their big gains this year in a sudden September swoon. The benchmark S&P 500 has notched a gain in each of the past three weeks. Even so, trading often has been choppy from one day to the next, reflecting uncertainty over the timing of more stimulus for the economy.

Investors were also looking ahead to another busy week of corporate earnings reports. Across the S&P 500, analysts are expecting companies to report another drop in profits.

In energy trading, U.S. benchmark crude fell 26 cents to $40.57 a barrel. Brent crude, the international standard, lost 29 cents to $42.33 a barrel.

The U.S. dollar inched up to 105.58 Japanese yen from 105.46 yen late Monday. The euro cost $1.1767, up slightly from $1.1708.


AP Business Writers Ken Sweet, Damian J. Troise and Alex Veiga contributed.

Copyright AP - Associated Press
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