By Gina Lee
Investing.com – Asia Pacific stocks were mostly down on Thursday morning, after U.S. tech stocks dragged the market down during the previous session. Rising doubt over whether the U.S. will pass the latest stimulus measures ahead of a looming deadline also put a damper on investor sentiment.
China’s Shanghai Composite was up 0.28% by 10:58 PM ET (2:58 AM GMT) while the Shenzhen Component inched down 0.02%. Investors are still digesting Wednesday’s data that indicated a slowdown in Chinese economic recovery, with the consumer price index (CPI) contracting 0.6% month-on-month and contracting 0.5% year-on-year. The producer price index (PPI) contracted 1.5% year-on-year.
Hong Kong’s Hang Seng Index was down 0.30%. Stricter restriction measures, with restaurants stopping dine-in services from 6 PM onwards, as well as closed gyms and beauty parlors, came into effect in the city from Thursday.
Japan’s Nikkei 225 was down 0.35% and South Korea’s KOSPI edged down 0.20%.
In Australia, the ASX 200 fell 0.62%.
Tech stocks were down, with Facebook Inc (NASDAQ:FB) facing lawsuits filed by the U.S. Federal Trade Commission and nearly every U.S. state and Tesla (NASDAQ:TSLA) Inc branded by JPMorgan Chase & Co. (NYSE:JPM) as “dramatically” overvalued.
Investors are also looking to whether the Republicans and Democrats will reach a deal on the latest stimulus measures. Negotiations are at their most intense since the Nov. 3 presidential election, with a Dec. 11 deadline to avert a government shutdown just a day away. Both sides are working on proposals and counter proposals but have yet to resolve a deadlock over the price tag, business liability shields as well as aid to state and local governments.
However, some investors were not too optimistic even if the two sides reached an agreement before the deadline.
“The idea here is that you’re not going to see a huge stimulus package … you are probably going to get something done, but it’s probably not going to be enough to put a lot of pressure on rates overall,” Invesco senior portfolio manager Matt Brill told Bloomberg.
Across the Atlantic, U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen held talks on Wednesday over a “frank” and “lively” dinner of turbot. The two leaders deferred a “firm decision” about the future of Brexit trade talks until Sunday, as the European Commission and the U.K. remained “far apart” on the trade deal. The two sides have until the end of the year to reach a consensus.
The European Central Bank will convene later in the day for its policy meeting, where the central bank is widely expected to roll out an increased and extended pandemic bond-buying program.
The Federal Reserve will also meet for its own policy meeting later in the day.
On the vaccines front, the U.S. Food and Drug Administration (FDA) will convene to discuss BNT162b2, the COVID-19 vaccine co-developed by Pfizer Inc (NYSE:PFE) and BioNTech SE (F:22UAy), also later in the day. Should the FDA grant emergency use authorization during the meeting, distribution could begin within 24 hours, Health & Human Services Secretary Alex Azar has said.
Health Canada gave its nod to the jab on Wednesday, following the U.K.’s Medicines & Healthcare Products Regulatory Agency (MHRA) granting a temporary authorization for emergency use during the previous week. The U.K. has already inoculated its first patients, but MHRA has warned that anyone with a history of anaphylaxis to a medicine or food should not be inoculated.