By Gina Lee
Investing.com – Asia Pacific stocks were mostly up on Wednesday morning, seeing gains as optimism over the latest stimulus measures being passed by the U.S. Congress, but with those gains capped by a wobbling tech sector.
Japan’s Nikkei 225 was up 0.48% by 11:14 PM ET (3:14 AM GMT) and South Korea’s KOSPI was up 0.22% with data released earlier in the day showed that Korea's Producer Price Index (PPI) rose 0.4% year-on-year and 0.1% month-on-month, both lower than August’s readings.
Hong Kong’s Hang Seng Index was up 0.52%. The city relaxed social distancing measures to permit local tours of up to 30 people each and wedding ceremonies of no more than 50 guests, to come into effect from Friday.
In Australia, the ASX 200 inched up 0.10%. Data released earlier in the day showed a 0.2% growth in the Westpac/Melbourne Institute (MI) Leading Index, a preliminary indication of retail sales figures, month-on-month. However, the growth was smaller than the last reading of 0.5%.
China’s Shanghai Composite was down 0.44% and the Shenzhen Component slid 1.19%.
“It will be quite a mixed day … people are digesting the potential for a stimulus bill, and markets are very cautious on the back of that,” CommSec senior economist Ryan Felsman told Reuters.
Both U.S. and Asian stocks rallied after President Donald Trump indicated on Tuesday that he was willing to accept a package with a larger price tag, saying, “I want to do it even bigger than the Democrats.”
House of Representatives Speaker Nancy Pelosi also raised hopes that the stimulus measures would be passed before the Nov. 3 presidential election, saying, “I hope so. That’s the plan,” for an agreement to be reached the following week. Pelosi will continue talks with Treasury Secretary Steven Mnuchin later in the day.
However, other investors were more cautious about the prospects of a deal, as Republican opposition to the measures’ price tag remains and the Federal Reserve calls for more fiscal support to complement unprecedented monetary aid. The Fed is due to release its ‘Beige Book’ economic survey later in the day,
“Equity markets are under some pressure following limited advances in stimulus talks … the odds of a deal being low, tells us much about the battle between hope and the reality of an economy still under severe shock but recovering,” Nordea Investment Funds SA senior macro strategist Sebastien Galy said in a note.
Investors are also keeping an eye on the tech sector after the U.S. Justice Department sued Alphabet’s Google (NASDAQ:GOOGL) on Tuesday over Google’s alleged abuse of its online search market monopoly, the most significant antitrust action against an American company in more than 20 years.
Meanwhile, European Central Bank President Christine Lagarde warned that the unexpectedly early pickup in COVID-19 infections is a “clear risk” to the economic outlook in Europe, with the region seeing a surging number of new cases.