SYDNEY, Oct 14 ― Asian equities were set to slip today as halted Covid-19 vaccine trials and an elusive US stimulus agreement weighed on investor sentiment, while the dollar rose from yesterday's three-week low as demand firmed for safe-haven assets.
Johnson & Johnson said yesterday that it was pausing a Covid-19 vaccine trial due to a study participant's unexplained illness. Eli Lilly and Co later said that it had also paused the clinical trial of its Covid-19 antibody treatment due to a safety concern, leading the US equity market to deepen losses.
J&J shares lost 2.3 per cent, while Eli Lilly closed down nearly 3 per cent.
“That just spoke to the fact that a vaccine could take longer to be delivered than what the market's expectations are calibrated towards,” said CommSec market analyst Tom Piotrowski in Sydney.
The Australian share market will likely open about 1 per cent lower when trading kicks off today, Piotrowski said.
On Wall Street, the Dow Jones Industrial Average fell 157.71 points, or 0.55 per cent, to 28,679.81, the S&P 500 lost 22.29 points, or 0.63 per cent, to 3,511.93 and the Nasdaq Composite dropped 12.36 points, or 0.1 per cent, to 11,863.90.
The US dollar was on track for its best daily performance in three weeks. The dollar index rose 0.543 per cent, with the euro down 0.02 per cent to US$1.1742 (RM4.86). MSCI's gauge of stocks across the globe shed 0.03 per cent.
Australian S&P/ASX 200 futures were down 0.74 per cent at 22:50 GMT, while Japan's Nikkei 225 futures were up 0.13 per cent.
The Nikkei 225 index closed up 0.18 per cent at 23,601.78 yesterday. The futures contract is down 0.16 per cent from that close.
E-mini futures for the S&P 500 rose 0.09 per cent.
The pan-European STOXX 600 index lost 0.55 per cent.
The Australian dollar was slugged by news that Beijing has stopped taking shipments of Australian coal, dragging the Aussie 0.03 per cent lower versus the greenback at US$0.716.
Hopes for the passage of a new coronavirus relief package faded as US House Speaker Nancy Pelosi rejected a US$1.8 trillion coronavirus relief proposal from the White House, saying it “falls significantly short of what this pandemic and deep recession demand.”
Sentiment in European and US equities defied earlier resilience in Asia, where Chinese shares got a lift from data released yesterday that showed exports rising 9.9 per cent in September and imports swinging to a 13.2 per cent gain, versus a 2.1 per cent drop in August.
The data signalled a rebound in the world's second-largest economy but was mostly brushed aside by world stock and bond markets. Still, it boosted oil prices as investors hoped for a slow recovery in energy demand.
China's trade improvement boosted US crude, which recently fell 0.22 per cent to US$40.11 per barrel. Brent was flat at US$42.45.
Spot gold prices closed up 0.05 per cent to US$1,891.61 an ounce.
The Japanese yen was flat versus the greenback at 105.47 per dollar, while sterling was last trading at US$1.2932, down 0.02 per cent on the day.
Bank of England Governor Andrew Bailey yesterday said he did not think the economy was undergoing a sharp, 'V'-shaped recovery, because of headwinds from a second wave of Covid and underlying public caution about spending and socialising after the pandemic.
“A 'V' is really not the way I look at it in terms of what we face going ahead,” Bailey told the House of Lords' Economic Affairs Committee. “The recovery will take time.”
Investors are also watching tensions between the European Union and Britain after the EU demanded “substantive” movement yesterday on fisheries, dispute settlement and guarantees of fair competition in their talks on a post-Brexit trade deal, with Germany saying they were at a “critical stage.”
EU leaders hold a summit in Brussels tomorrow and Friday to assess progress.
Government bond yields mostly fell as demand for safe-haven bonds firmed.
The benchmark 10-year Treasury yield retreated to 0.7256 per cent, the biggest one-day drop since August 4. ― Reuters
