SYDNEY, Oct 20 — Asian markets advanced toward a recent 2-1/2-year peak today powered by hopes of a US fiscal package and expectations of a coronavirus vaccine by the end of this year, though gains were held back by weaker-than-expected Chinese economic data.
In early European trades, the pan-region Euro Stoxx 50 futures added 0.25 per cent, German DAX futures were slightly higher while London’s FTSE futures were down 0.07 per cent.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.5 per cent for its second straight day of gains, paring back slightly following third-quarter gross domestic product (GDP) data from China.
The index has risen in eight of the last 10 sessions amid a rally in risk assets buoyed by hopes of a coronavirus vaccine and expectations of a so-called “blue wave”, which would see the Democrats claim victory in November’s elections.
Chinese shares started higher but slipped into negative territory in afternoon trading after China’s third-quarter GDP data rose 4.9 per cent, missing expectations for a 5.2 per cent growth.
In a positive sign, however, separate monthly indicators pointed to an expansion in economic activity.
Industrial output accelerated 6.9 per cent in September from a year earlier, when analysts were looking for a 5.8 per cent gain from a 5.6 per cent rise in August.
Retail sales edged up 3.3 per cent last month from a year earlier against expectations for 1.8 per cent growth.
“The rebound in Q3 GDP was less strong than expected, but was still a decent 4.9 per cent year on year. September data beat expectations, suggesting a pick-up in momentum towards the latter part of Q3,” said Frances Cheung, head of macro strategy for Asia at Westpac in Singapore.
“The pick-up in momentum was broad based, which bodes well for the Q4 outlook.”
Japan’s Nikkei rose 1.1 per cent while Australia’s benchmark index added 0.9 per cent.
Boosting overall sentiment, drugmaker Pfizer Inc said on Friday it could have a coronavirus vaccine ready in the United States by the end of this year.
E-Mini futures for the S&P 500 jumped 0.7 per cent in Asian trading after House Speaker Nancy Pelosi said yesterday she was optimistic legislation on a wide-ranging coronavirus relief package could be pushed through before the election.
But with her negotiating partner, Treasury Secretary Steven Mnuchin, in the Middle East until tomorrow, such a timeframe would seem to be overly optimistic, analysts said.
Investors are also concerned about rising coronavirus cases. Global coronavirus cases rose by more than 400,000 for the first time late on Friday, a record one-day increase as much of Europe enacts new restrictions to curb the outbreak.
Later in the week, key risk events include minutes of Australia’s central bank meeting, the final US presidential debate and global manufacturing indicators.
Action in currencies was muted with the US dollar, usually perceived as a safe-haven asset, flat at 93.696 against a basket of six major currencies.
The euro was slightly weaker at US$1.1708 (RM4.86) and sterling hovered near two-week lows after UK Prime Minister Boris Johnson told businesses to get ready for a no-deal Brexit in case negotiations with the European Union fail to produce a free trade agreement.
“EU-UK trade talks are flirting with collapse,” ANZ economists said.
“UK Prime Minister Johnson said the UK needs to prepare for a no-deal outcome, as both sides cannot agree on a Canada-style FTA. Talks resume in London today, but without the political willingness to shift ground, there is little the negotiators can achieve.”
In commodities, Brent crude futures slipped 10 cents to US$42.83 a barrel, and US West Texas Intermediate (WTI) crude futures fell 12 cents to US$40.76 a barrel.
Spot gold rose 0.6 per cent to US$1,909.6 an ounce. — Reuters
