SINGAPORE/NEW YORK (Reuters) – Asian stocks inched up on Friday, despite Wall Street declines, but struggled to make deeper gains as worries about a faltering economic recovery kept investors to the sidelines or seeking safer harbour in assets such as the Japanese yen.
Oil prices held hefty overnight gains after OPEC flagged a crackdown on member states that did not cut output and the dollar was back to nursing losses after a brief journey higher in the wake of Wednesday’s Federal Reserve meeting.
MSCI’s broadest index of Asia-Pacific shares outside Japan looked set to end the week 1% ahead following two weeks of tech-led losses. It rose 0.2% on the day while market moves around the region were small.
Japan’s Nikkei edged 0.1% higher. The ASX 200 was flat, while stocks in Shanghai, Hong Kong and Seoul rose between 0.2% and 0.4%.
U.S. stock futures were soft, with S&P 500 futures down 0.2%, though Nasdaq 100 futures turned positive by the middle of the Asia session to trade 0.07% higher.
“The bigger picture issue is that markets, particularly growth and tech stocks, have run very hard into the end of August, which has left them somewhat vulnerable,” said AMP Capital chief economist Shane Oliver.
“There’s uncertainty ahead of the US elections…China-US tensions keep creeping in and on top of that there’s now uncertainty about how the recovery will proceed from here in the absence of more stimulus in the US”
Overnight data showed recovery in the US labour market stalling and Wall Street indexes fell for a second straight session amid disappointment that the Fed made no new monetary easing commitments at its meeting this week.
The S&P 500 ended down 0.84%, and the Nasdaq dropped 1.27%. The Nasdaq’s losses put the index down roughly 10% from a record high hit early in September and have it tracking for its worst month since March.
“Unlike June, there is more fear of a deeper correction,” analysts at Singapore’s DBS Bank said in a note – since the Nasdaq is below its 50-day moving average, a key technical support level, and the U.S. election is fast approaching.
“The landscape is more challenging compared to three months ago.”
Also Read: 2020 US elections: Biden with 237 votes, Trump with 210
