Reuters - Stock indexes were hardly changed Friday as market participants tightened positions with fewer than two weeks to go before the U.S. presidential election and waited for a breakthrough in virus aid talks in the U.S.
A debate between U.S. President Donald Trump and his Democrat challenger Joe Biden on Thursday presented few surprises for election watchers but reinforced market-participant caution heading into the Nov. 3 poll.
U.S. S&P 500 futures dipped slightly after the debate but were mostly flat by midday trade. The underlying index had gained about 0.5% in the previous day on hopes that the U.S. Congress and the White House might soon strike a deal on another round of COVID-19 stimulus.
Shares in Asia hardly budged. MSCI's broadest index of Asia-Pacific shares outside Japan was even while Japan's Nikkei ticked up 0.2%. The CSI300 index of mainland China also edged up 0.2%.
At Thursday's debate, Biden renewed his criticism of Trump's handling of the coronavirus pandemic as Trump levelled corruption accusations at Biden and his family.
"I don't think there's anything new in it, I think that's why the market is not moving much. The focus is still on the timing of the fiscal stimulus and how big it is," Bank of Singapore foreign-exchange analyst Moh Siong Sim said.
On Thursday, U.S. House of Representatives Speaker Nancy Pelosi reported progress in talks with the Trump administration for another round of financial aid, saying legislation could be hammered out "pretty soon."
While the news helped to lift U.S. share prices, the U.S. S&P500 is still down 0.9% so far this week amid uncertainties over stimulus and the election.
A widening lead in polls by Biden is prompting many market participants to bet on a Biden presidency and also a "blue sweep," where Democrats win the both chambers of Congress.
"A blue wave may lead to concerns about the impact on the tech sector, while a Biden win and a split Congress may imply another four years of limited policy changes and politicking," Pinebridge Investments senior economist in Singapore Mary Nicola said.
Reflecting concerns Democrats could take a harder stance on big tech firms, the Nasdaq index, which had led the market's rally, has underperformed lately, having lost 1.4% so far this week.
Expectations of bigger government stimulus have also boosted U.S. borrowing costs.
The 10-year U.S. Treasurys yield rose to a four-and-a-half-month high of 0.870% Thursday and were last at 0.853%.
U.S. economic data published Thursday surprised to the upside, as jobless claims fell more than expected and existing home sales exceeded estimates to more than a 14-year high.
In the currency market, the dollar bounced back from Wednesday's seven-week low but stayed under pressure as market participants began to wager on a Biden presidency and big U.S. stimulus.
The euro traded at $1.1803, down 0.2% and off Wednesday's high of $1.1805 but still up 0.7% on the week.
The yen changed hands at 104.77 yen per dollar, stepping back a tad after its biggest gain in nearly two months Wednesday.
The China yuan was at 6.6729 per dollar in offshore trade - off a 27-month high of 6.6278 Wednesday.
Oil prices were supported by hopes of U.S. virus aid and the prospect of extended output cuts.
Brent futures ticked up 0.3% to $42.59 per barrel while U.S. crude futures rose 0.25% to $40.74 per barrel.