GLOBAL MARKETS-Asian shares slip as surging coronavirus cases weigh on global economy

By Kane Wu
Oct 27 (Reuters) - Asian stocks fell on Tuesday as investors
were unnerved by the soaring global coronavirus cases that
dampened the recovery outlook and slow progress on a U.S.
stimulus deal.
U.S. shares however were set to bounce back from Wall
Street's worst day in a month with E-mini futures for the S&P
500 ESc1 up 0.23%. London's FTSE futures FFIc1 edged up
0.02%.
MSCI's gauge of Asia Pacific stocks outside Japan
.MIAPJ0000PUS was down 0.43%, while Australia's ASX 200
.AXJO closed down 1.7%, in its worst session in a month.
China's CSI300 Index .CSI300 pared morning losses, as
investors looked out for any news from a meeting of China's
Communist Party leaders to set the next five-year plan.
"Two events in the next few days will shape the policy
outlook for the world's two largest economies: China's 14th
Five-Year Plan and the U.S. elections," said Tai Hui, chief Asia
market strategist at J.P. Morgan Asset Management.
"The recent surge in infections in the U.S. and Europe is
also denting market sentiment."
Rising coronavirus cases around the world are forcing some
countries to impose new curbs, risking derailing any global
economic recovery. Data out earlier also showed China's industrial profits grew
at a slower pace in September, suggesting a recovery in the
manufacturing sector of the world's second-largest economy has
yet to solidify. In Japan, the benchmark Nikkei 225 .N225 dropped 0.11%
while Hong Kong's Hang Seng index .HSI was down 0.76%.
China's Ant Group 688688.SS , 6688.HK will close its Hong
Kong institutional book building a day earlier than planned as
it aims to raise about $17.2 billion in the city, Reuters
reported on Tuesday. The group, controlled by Alibaba founder
Jack Ma, is set to raise up to $34.4 billion in a dual listing
in Hong Kong and Shanghai in the world's largest IPO.
U.S. indices fell sharply overnight over the double whammy
of record coronavirus cases and political deadlock in
negotiations to provide more economic aid.
White House economic adviser Larry Kudlow told reporters on
Monday that talks over a coronavirus relief package have slowed,
though House Speaker Nancy Pelosi remained hopeful an agreement
can be reached before the Nov. 3 elections.
"The challenge for markets is that in most cases they are
already pricing a very strong economic bounce. The new
outbreaks, and the potential for a double-dip recession,
directly contradict this assumption," Michael McCarthy, chief
market strategist at CMC Markets in Sydney.
National polls give Democrat Joe Biden a solid lead over
president Donald Trump but the contest is much tighter in
battleground states that could decide the outcome. The sharp stock market decline set a bleak tone ahead of a
busy third-quarter earnings season, with large U.S. tech firms
like Apple Inc AAPL.O , Amazon.com Inc AMZN.O and
Google-parent Alphabet Inc GOOGL.O set to report. Microsoft
Corp MSFT.O reports its results Tuesday.
The dollar =USD was down 0.153% during the Asia day to
trade at 92.932 against a basket of six major currencies.
Much of the trading in currency markets, as well as other
asset markets, was buffeted by the renewed coronavirus fears.
Oil prices eked out small gains on Tuesday after recent
sharp losses, but sentiment remained subdued as surging global
coronavirus cases hit prospects for crude demand while supply is
rising. Brent crude LCOc1 was up 35 cents, or 0.87%, at $40.81
a barrel, having dropped more than 3% overnight. U.S. oil CLc1
was up 30 cents, or 0.78%, at $38.86 a barrel, after also
declining more than 3% on Monday. The safe-haven Spot gold XAU= added 0.32% to $1,907.64 an
ounce.

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