By Adam Claringbull
Investing.com – Asia Pacific stocks were mostly down on Wednesday morning after two major U.S. COVID-19 treatment trials were paused over patient safety concerns. Also hampering stocks is the ongoing lack of action on U.S. COVID-19 stimulus plans, with any action looking increasingly likely to be put off until after the U.S. elections.
The Shanghai Composite was up down 0.46% at 11:08 PM ET (3:08 AM GMT) and Shenzhen’s SZSE Composite was down 0.47%. Chinese President Xi Jinping is due to deliver an “important address” in Shenzhen later in the day, marking the 40th anniversary of the establishment of the special economic zone. The speech is expected to lay out greater autonomy for the region.
Japan’s Nikkei 225 inched up 0.07%, reversing some earlier losses. South Korea’s KOSPI fell 0.69%, with the Bank of Korea keeping its key interest rate steady at 0.50% earlier in the day.
Hong Kong’s Hang Seng Index inched up 0.04% and Australia’s S&P/ASX 200 inched down 0.08%.
Asia Pacific markets were subdued in early trading , after Eli Lilly and Co.'s (NYSE:LLY) COVID-19 antibody treatment trial was paused over concerns for patient safety, pulling U.S. markets down by the close of the previous day’s trading. The news follows Johnson & Johnson's (NYSE:JNJ) pause on clinical trials for its COVID-19 vaccine the day before due to a patient illness.
“That just spoke to the fact that a vaccine could take longer to be delivered than what the market’s expectations are calibrated towards,” CommSec market analyst Tom Piotrowski told Reuters.
Adding to investor concerns is the strengthening likelihood of no U.S. COVID-19 stimulus package becoming available until after the Nov. 3 U.S. elections. U.S. House of Representatives Speaker Nancy Pelosi rejected U.S. President Donald Trump’s latest $1.8 trillion COVID-19 as it stands, and even that deal met resistance from the president’s own party, with several Senate Republicans denouncing its cost.
Mark Heppenstall, chief investment officer at Penn Mutual Asset Management had this to say of recent U.S. stimulus events, telling Bloomberg, “It’s been a rollercoaster ride in terms of communication from both sides. There are still going to be significant pockets of stress in the economy.”
However, the increasing odds of a Democrat win at the polls are giving positivity to the markets, as a Democrat stimulus package is anticipated to be far more substantial than the recent deals that have been on offer.
Rising European COVID-19 cases are present further market headwinds, with increased restrictions planned for many countries.
U.K. Prime Minister Boris Johnson has set a deadline of Oct. 15 to finalize the framework of a U.K/E.U trade deal, though there is much skepticism about the likelihood of such a deal being completed in the timeframe.
European Central Bank President Christine Lagarde is to open the virtual annual meetings of the International Monetary Fund and the World Bank Group. The meetings take place over Oct. 12-18.