TOKYO – Shares skidded in Asia on Tuesday after surging coronavirus cases and waning hopes for U.S. economic stimulus gave Wall Street its worst day in a month.
Stock benchmarks fell in Tokyo, Shanghai, Hong Kong and Sydney. Shares were flat in South Korea, where economic growth data were slightly better than expected.
Overnight, the S&P 500 fell 1.9%, deepening its losses from last week. Stocks of companies worst hit by the pandemic logged some of the biggest losses. Cruise lines, airlines and energy stocks tumbled in tandem with crude oil prices.
In another sign of caution, Treasury yields pulled back after touching their highest level since June last week and were steady at 0.80% on Tuesday.
The gloom carried into trading in Asia, where Japan's Nikkei 225 lost 0.3% to 23,428.70 and the Hang Seng in Hong Kong slipped 0.8% to 24,719.38. South Korea's Kospi gained a fraction of a point to 2,344.48, while the S&P/ASX 200 slumped 1.8% to 6,042.60. The Shanghai Composite index gave up 0.2% to 3,244.23.
South Korea's relatively strong showing reflected a better than expected 1.9% economic growth in the last quarter, following a 3.2% quarterly decline in April-June. Strong exports led the rebound, economists said.
Doubts are mounting that Washington will come through with more stimulus for the economy before the Nov. 3 Election Day after House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to reach an agreement in a phone call Monday, according to a Pelosi aide. The two have been discussing a potential deal to send cash to most Americans, restart supplemental benefits for laid-off workers and provide aid to schools, among other things.
Any compromise reached between House Democrats and the White House faces stiff resistance from Republicans in control of the Senate. Another concern is that possible delays in sorting out the results of next week’s elections could end up pushing a stimulus deal back indefinitely.