Reuters - Asia stock-price indexes fell Tuesday as market participants adjusted risk exposure heading into the U.S. election and as a deadline for that country to pass an economic aid bill approached while Europe reported record daily coronavirus infections.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.11% lower after U.S. stocks ended the previous session in the red. Australia and Japan markets also dipped and MSCI's gauge of stocks across the world was 0.09% lower.
While there were worries about the U.S. aid package, recent declines were likely a result of positioning ahead of the Nov. 3 presidential election, Chris Weston, the head of research at Melbourne brokerage Pepperstone, said. "Do you really want to hold those exposures into what could be a volatility event?" Weston said. "We're getting into the Wild West territory where it becomes more whippy."
Caution among market participants was also driven by rising concerns about the risk of a disputed U.S. election outcome.
"Such an event would very likely upset global markets considerably until the U.S. reaches an accepted resolution," said American Century joint chief information officer Keith Creveling.
Japan's Nikkei slipped 0.34%. Hong Kong's Hang Seng index bucked the trend to rise 0.16%.
Market participants await key earnings results later in the week for companies including Netflix Inc and Tesla Inc.
They were also waiting to see if the final debate between U.S. President Donald Trump and his Democratic challenger Joe Biden on Thursday shifts the trajectory of the election.
The number of new COVID-19 cases in the U.S. last week rose 13% to more than 393,000, approaching levels last seen during a summer peak, according to a Reuters analysis.
The Dow Jones Industrial Average fell 1.44%, the S&P 500 was 1.63% lower and the Nasdaq composite settled down 1.65%.
Europe shares closed lower as surging COVID-19 cases raised market participant concerns. Parts of the UK were put into lockdown and France imposed curfews.
In contrast to equity markets, currency markets were less pessimistic about the prospect of a stimulus breakthrough with the safe-haven dollar edging slightly lower amid expectations that U.S. lawmakers might still agree on a fiscal stimulus package at the eleventh hour.
Dollar moves, however, were modest with the dollar index 0.015% lower Tuesday. The dollar rose 0.03% against the yen to 105.46 while the euro was up 0.03% to $1.1772.
The Australia dollar fell 0.2% versus the U.S. unit at $0.7045, hurt by expectations that the central bank would soon cut rates and expand its massive bond buying campaign to lower borrowing costs.
In oil markets, U.S. West Texas Intermediate crude futures fell 0.3% to $40.69 a barrel while Brent crude futures dipped 0.6% to $42.36 a barrel.
