Asian stocks dip after Wall Street hit record high on stimulus hope

Asian stock markets declined after Wall Street hit a new high on optimism about economic stimulus and coronavirus vaccine development despite a spike in US unemployment claims

Asian stock markets declined Friday after Wall Street hit a new high on optimism about economic stimulus and coronavirus vaccine development despite a spike in US unemployment claims.

Shanghai, Tokyo and Hong Kong retreated.

Overnight, Wall Street's benchmark S&P 500 index gained for a third day on optimism about progress in Washington toward a new economic aid package while the government reported the highest level of new jobless claims in three months.

Market action suggested investors see bad data is good news for progress toward a stimulus, said Mizuho Bank in a report.

The Nikkei 225 in Tokyo lost 0.2% to 26,760.30 while the Shanghai Composite Index was down less than 0.1% at 3,403.87. The Hang Seng in Hong Kong lost 0.7% to 26,490.37.

The Kospi in Seoul lost less than 0.1% to 2,770.22 and Sydney's S&P-ASX 200 sank 0.7% to 6,710.00. New Zealand, Singapore and Jakarta also retreated.

Investors have been waiting since before the American presidential election Nov. 3 for legislators to agree on new aid to replace unemployment benefits that are expiring.

That loss in income undercuts consumer spending that powers the biggest global economy and demand for imports from Asian and other suppliers.

The Labour Department reported the number of Americans applying for unemployment benefits rose to 885,000 last week, the highest level since September.

Progress in developing and distributing coronavirus vaccines has helped to buoy optimism the U.S. economy might start to recover next year.

Democrats and Republicans in Congress are locked in a fight divided by party lines over the size and scope of an aid package at a time when the economy is showing fresh signs of stalling due to pressure from the pandemic.

Despite that, the S&P 500 rose 0.6% on Thursday to 3,722.48. The Dow Jones Industrial Average gained 0.5% to 30,303.37. The Nasdaq added 0.8% to 12,764.75.

Investors received more encouragement from the Federal Reserve, which helped shore up the markets early in the pandemic.

The central bank has again pledged to keep buying bonds until the economy makes substantial progress. Still, the Fed has said it can only do so much to tide over the economy and that more financial support from Washington is critical for a continued recovery.

In energy markets, benchmark U.S. crude lost 13 cents to $48.23 per barrel in electronic trading on the New York Mercantile Exchange. It rose 54 cents on Thursday to $48.36. Brent crude, the price standard for international oils, declined 21 cents to $51.29 per barrel in London. The contract rose 42 cents the previous session to $51.50.

The dollar gained to 103.36 yen from Thursday's 103.11 yen. The euro declined to $1.2251 from $1.2264.