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TOKYO, Oct. 15 (Reuters) – Global equities slipped Thursday as investors stalled recent gains amid growing concerns over the resurgence of COVID-19 infections and after the U.S. Treasury Secretary dashed all hopes of stimulus plan ahead of the November 3 elections.
The largest MSCI index of Asia-Pacific stocks outside of Japan fell 0.5% while Japan’s Nikkei fell 0.5%.
US S&P 500 futures fell 0.27% in Asia after major US stock indices ended the previous session lower, with the S&P 500 closing 0.7% lower and the Nasdaq Composite index losing 0 , 8%.
Disappointing quarterly results from Bank of America and Wells Fargo drove the S&P 500 bank index down 2.4%.
Fears that a resurgence of the COVID-19 pandemic could lead governments to shut down economies again have boosted profit taking, especially after the recent rally in stocks.
With the surge in COVID-19 cases, some European countries are closing schools, canceling surgery and enlisting medical students as overwhelmed authorities preparing for a repeat of the nightmare scenario seen earlier this year.
This has helped push the yield on German 10-year Bunds to as low as minus 0.586%, a rate last seen in May.
Tensions between Beijing and Washington remain visible after US State Department submits proposal for Trump administration to add Chinese ant group IPO-ANTG.HK to a commercial blacklist, according to two people familiar with the matter, before the fintech arm of e-commerce giant Alibaba went public.
Adverse comments from U.S. Treasury Secretary Steven Mnuchin that a stimulus deal was unlikely before the November 3 vote also provided another excuse for profit taking.
Still, many investors expect a strong post-election revival, which Democratic presidential candidate Joe Biden is increasingly expected to win.
While Biden was seen as more likely to raise taxes on corporate profits and capital gains, investors also point to other potential benefits of a Biden presidency, such as less global business uncertainty.
“It smacks of opportunism when the markets said just a few months ago that stocks would crash if Trump lost and now they say Biden’s win would be good for stocks,” said Norihiro Fujito, chief strategist. investments at Mitsubishi UFJ Morgan Stanley Securities. “What this suggests is that the markets are teeming with liquidity after massive monetary easing by global central banks.”
On the currency front, the pound was up well at $ 1.3017, after climbing 0.6% on Wednesday on hopes of progress in negotiations between Britain and the European Union.
But some of the enthusiasm was lost after British Prime Minister Boris Johnson told European Commission chief Ursula von der Leyen he was disappointed that there had not been more progress in the talks.
The Australian dollar lost 0.5% to $ 0.7128 after the country’s central bank fueled speculation on short-term interest rate cuts and longer-term government debt purchases.
The need for further stimulus in Australia was underscored by data showing 29,500 jobs were lost in October, as the unemployment rate rose a notch to 6.9%.
The euro was little moved at $ 1.1725 while the dollar changed hands at 105.20 yen.
Oil prices edged up at the start of trading on Thursday after US crude inventories fell last week, adding 2% gains overnight, as OPEC and its allies fully complied in September with their production reduction pact.
U.S. West Texas Intermediate (WTI) crude futures rose 0.1% to $ 41.07 per barrel while Brent futures rose 0.2% to $ 43.39 per barrel. barrel. (Additional reporting by Suzanne Barlyn in New York; Editing by Sam Holmes)