Asian market declines

Asian stocks declined Thursday morning after a market downturn in the US during the previous session, as the ever-increasing number of COVID-19 cases and statements by several US Federal Reserve officials on Wednesday dampened hopes for a global recovery from the virus.

With governments re-introducing quarantines to contain new outbreaks of the virus in the US and Europe, there are fears that more countries in parts of the Northern Hemisphere will face outbreaks of the virus as the cold weather sets in.

Fed officials stressed the need for additional financial stimulus to sustain the economic recovery in the hope that the US Congress will break the deadlock with a stimulus package ahead of the fast-approaching US presidential election in November. Led by Fed Chairman Jerome Powell, who said during Congressional hearings that the economy is likely to need additional support, Cleveland Fed Governor Loretta Mester, Chicago Fed Chairman Charles Evans and Boston Fed Governor Eric Rosengren added their words to this opinion.

Some investors were pessimistic about the forecasts.

“The market is digesting and trying to overcome the idea that the growth hope that investors had may not be met,” Lauren Goodwin, economist at New York Life Investments and multi-asset portfolio strategist, told Bloomberg.

“As the US fiscal momentum wanes, some hopes for a slow and sustained recovery have shattered,” she added.

Japan’s Nikkei 225 fell 0.78% by 11:30 pm ET (03:30 GMT), while South Korea’s KOSPI fell 2.05%.

Australia’s ASX 200 Index fell 1.13% and Hong Kong’s Hang Seng Index fell 1.91%.

China’s Shanghai Composite Index fell 1.46% and the Shenzhen Component Index fell 1.85%. Investor sentiment was stifled after an independent survey of more than 33,000 businesses by the China Beige Book from Aug.13 to Sept.12 showed that economic recovery is only taking place in China’s wealthier coastal regions. The study also highlighted problems in sectors such as services.

Investors are also looking at the TikTok deal and the sale of its US operations to Oracle. TikTok’s parent company, Byte Dance, has filed a request to temporarily block the ban from US President Donald Trump on the app, which could lead to the app being removed from US mobile app stores over the coming weekend.

Meanwhile, Fed Chairman Jerome Powell and Treasury Secretary Stephen Mnuchin are due to speak to a Senate committee on the COVID-19 response later Thursday.

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