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GLOBAL MARKETS-Asian stocks grind lower as focus shifts to Georgia Senate runoff

Published 2021-01-05, 12:30 a/m
© Reuters.
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* Asian stock markets: https://tmsnrt.rs/2zpUAr4

* Asian shares pull back from record high

* Georgia Senate runoff seen as political risk

* State of emergency weighs on Tokyo shares

* Oil hit by delay on output decision

By Stanley White

TOKYO, Jan 5 (Reuters) - Asian shares edged lower on Tuesday amid uncertainty about Senate runoffs in Georgia, which could have a big impact on incoming U.S. President Joe Biden's ability to pursue his preferred economic policies.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.05%, pulling back from a record high. Australian stocks .AXJO fell 0.26%.

Chinese shares .CSI300 erased early losses and rose 0.52%. In Hong Kong, China Mobile 0941.HK , China Unicom 0762.HK , and China Telecom 0728.HK rallied by more than 6% after the New York Stock Exchange abandoned plans to delist the companies' shares from its bourse. shares .N225 lost 0.34% after a spokesman said the government will reach a decision on a state of emergency for Tokyo and surrounding cities on Thursday to curb coronavirus infections. S&P 500 stock futures ESc1 edged up 0.03%. Euro Stoxx 50 futures STXEc1 were down 0.39%. German DAX futures FDXc1 fell 0.34%, and FTSE futures FFIc1 fell 0.26%.

Oil futures were little changed in cautious trade as investors awaited a meeting later on Tuesday where major crude producers are set to decide output levels for February.

In the United States, control of the Senate is at stake with Tuesday's dual runoff elections in Georgia. Democratic victory in both races could tip control of the Senate away from Republicans, but both contests are very tight and the results may not be immediately known, which could lead to a repeat of the chaotic vote re-counts after the U.S. presidential election last year.

"2021 starts with a bang with pivotal political and economic news for markets to digest. The undisputed highlight will be the result of the Senate seat run-off elections in Georgia," James Knightley, chief international economist at ING, wrote in a research memo.

"If the Democrats win both seats this should lead to the most substantial 2021 fiscal stimulus. Nonetheless, it could be the excuse for a near-term consolidation in risk markets after a strong post-election rally."

Uncertainty about the Georgia vote and worries about rising coronavirus infections sent Wall Street sharply lower on Monday.

The Dow Jones Industrial Average .DJI fell 1.27%, the S&P 500 .SPX lost 1.49%, while the tech-heavy Nasdaq .IXIC dropped by 1.48%.

Outgoing Republican President Donald Trump's call to pressure Georgia's top election official to "find" votes to overturn his loss to President-elect Biden in the state has also unnerved some investors. House and the Senate are scheduled to certify Biden's election win on Wednesday, but some Republicans have pledged to vote against this and thousands of Trump supporters are expected to converge on the capital in protest. MSCI's broadest gauge of global stocks .MIWD00000PUS was unchanged, sitting just below a record reached in the previous session.

Increased risk aversion helped the dollar index =USD rebound from a 2 1/2-year against a basket of major currencies, but moves were subdued at the start of the year.

The British pound GBP=D3 bought $1.3591, recovering some of Monday's losses after Prime Minister Boris Johnson ordered a lockdown to try and slow a fast-spreading coronavirus variant. crude futures CLc1 were little changed at $47.61 a barrel, while Brent futures LCOc1 edged down by 0.1% to $51.04 per barrel. Major oil producers will meet later on Tuesday to decide on output levels for February after talks broke down the previous day. was slightly lower. Spot gold XAU= fell 0.16% to $1,939.25 per ounce. GOL/

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http://tmsnrt.rs/2egbfVh 2020 asset performance

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