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GLOBAL MARKETS-Shares falter again, but Asia poised to end October with near 4% gain

Published 2020-10-30, 01:30 a/m
© Reuters.
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(Adds European futures, updates prices throughout)

* MSCI ex-Japan down for third day in a row

* MSCI ex-Japan set for 1st weekly loss since late-Sept

* Eyes on U.S. presidential election, rising COVID cases

By Swati Pandey

SYDNEY, Oct 30 (Reuters) - A gauge of Asian shares fell for a third straight session on Friday as jitters over next week's U.S. presidential election and a shaky global economic outlook enveloped markets.

E-Mini futures for S&P500 ESc1 skidded 1.5%, a signal Wall Street would open in the red later in the day.

In early European trade, the pan-region Euro Stoxx 50 futures STXEc1 were down 0.4%, German DAX futures FDXc1 slipped 0.3% while London's FTSE futures FFIc1 were a shade weaker.

MSCI's broadest index of Asia-Pacific shares outside of Japan .MIAPJ0000PUS was last down 0.1%, on track to the end the week 1.1% lower after four straight weeks of gains.

Still, the index has risen 3.8% in October so far, and analysts expect this broader outperformance to extend further.

"For a crisis of this scale, Asian equities have performed remarkably well," Citi analysts wrote in a note.

"Within the region, markets with a higher weighting of technology stocks or where the recovery has become more entrenched have outperformed," they added.

"This solid performance can continue, in our view. Valuations are reasonable for an early stage of a recovery while liquidity is generous. There has also been a perceptible drop in volatility in recent months."

The mood on Friday was less positive, though.

Australia's ASX 200 .AXJO fell 0.5% and New Zealand's benchmark index faltered nearly 1%. Japan's Nikkei .N225 slipped 0.85% and was set for its biggest weekly loss in more than two months.

Chinese shares, which had started marginally higher, eased too with the blue-chip index .CSI300 off 0.1%.

Record numbers of coronavirus cases worldwide and the Nov. 3 U.S. presidential election remained the major focus for investors. On Wednesday, global coronavirus cases rose by over 500,000 for the first time, with France and Germany prepping fresh lockdowns. falls in Asia occurred despite a solid session on Wall Street overnight, which was helped by a diet of strong quarterly reports from tech giants and data showing the U.S. economy grew at a record annualised pace of 33.1% in the third quarter. with the rebound, U.S. output remains 3.5% below its pre-COVID levels. The path towards recovery is much less clear from here, especially as the number of virus cases grows and there are near-term impediments to a fiscal deal," wrote ANZ analysts in a note.

The European Central Bank committed to further action in December to further lend economic support as European nations grappled with a renewed coronavirus outbreak.

Analysts expect an expansion and extension of the ECB's Pandemic Emergency Purchase Programme, a lower deposit facility rate, and even more generous lending terms for banks in December.

The announcement sent the euro EUR= sliding to a four-week low of $0.1648 to be last at $1.1679. dollar was weaker against the Japanese yen JPY= at 104.34 while the risk-sensitive Australian dollar AUD=D3 rose 0.2% to $0.7043. FRX/ AUD/

In commodities, oil picked up after hitting a five-month low on Thursday, with Brent crude futures LCOc1 up 15 cents at $37.80 a barrel and U.S. crude CLc1 adding 5 cents at $36.22. rose, with spot prices climbing 0.4% to $1,874.06 an ounce.

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