Asian indices decline on US stimulus package uncertainty ahead of polls

Global stock markets and US futures declined on Thursday as hopes of US leaders agreeing on a new economic aid before the presidential election faded.

Wall Street’s benchmark S&P500 had dropped 0.7 per cent on Wednesday, after Treasury Secretary Steven Mnuchin said he and congressional leaders were “far apart” on a new aid for the struggling economy. Consumer spending, the main US economic engine, weakened after earlier additional unemployment benefits expired. Mnuchin “added another nail to the coffin on pre-election stimulus,” said Jingyi Pan of IG.

Thursday brings a EU summit that UK Prime Minister Boris Johnson had set as a deadline to get a trade agreement in place. As of Wednesday, talks remained in a deep rut over fundamental differences on the issues of state aid and fisheries.

On Wall Street, futures for the S&P500 and the Dow Jones Industrial Average were off 0.5 per cent. The Dow had lost 0.6 per cent and Nasdaq composite 0.8 per cent on Wednesday.

In Asian trading on Thursday, the Shanghai Composite Index lost 0.3 per cent to 3,332.18, while the Nikkei 225 in Tokyo sank 0.7 per cent to 12,827.82. The Hang Seng in Hong Kong lost 2.1 per cent to 24,154.15.

The Kospi in Seoul shed 0.8 per cent to 2,361.21 despite a strong market debut by the company that manages popular South Korean boy band BTS. The group faced criticism by Chinese internet users after its leader thanked Korean War veterans for their sacrifices.