By Scott Murdoch and Suzanne Barlyn.
HONG KONG/NEW YORK (Reuters) – Asian stocks slipped on Tuesday, refreshing Wall Street’s stronger lead, as China’s post-holiday rally cooled, but a boost in the technology sector and fresh optimism over U.S. stimulus is expected to continue to support sentiment.
MSCI’s broadest index of Asia-Pacific equities outside of Japan () fell into negative territory during the Asian session, down 0.09%.
Chinese stocks weakened in early trade, with the Shanghai Composite Index () slipping 0.5%, trimming gains in the two trading days since last week’s public holiday. China’s blue-chip index CSI 300 () fell 0.3 percent.
Hong Kong’s Hang Seng Index () was cancelled in early trading as it faced a typhoon warning.
In Japan, the Nikkei () was down 0.2%.
Despite volatility across the region on Tuesday, Simon Yuen, founder of Surich Asset Management, said he was confident that Asian equities would remain fundamentally positive after the U.S. election on Nov. 3.
Mr Yuen said: “We expect that Asian equities should outperform global equities in the next two to three years because if (Joe) Biden is elected, the US will have an easier relationship with China,” Mr. Yuan said.
“On the other hand, if (Donald) Trump is elected, China will boost demand in terms of consumer spending to increase their dominance of the world.”
Australia’s S&P/ASX 200 <.asxjo> was the only bright spot in the region, up 1 per cent as bank stocks strengthened, although major coal names were sold off after reports that China may seek to ban Australian imports of the commodity. ()</.asxjo>
On Wall Street, the Nasdaq Composite Index () staged its biggest one-day gain in a month on Monday, surging 2.56%. The Dow Jones Industrial Average () rose 0.88% and the S&P 500 () gained 1.64%.
The dollar was pinned near a three-week low and gold, another safe-haven asset, remained below its three-week high, pressured by investor demand for risk.
) rose 0.15 percent, reversing a decline earlier in the U.S. session.
Wall Street’s gains on Monday were driven by Apple Inc. (O:), which surged 6.4% ahead of the expected debut of its latest iPhone on Tuesday, and Amazon (O:), which rose 4.8% ahead of this week’s Prime Day shopping event.
Investors are now awaiting results from Bank of America, with JPMorgan Chase (N:) and Citigroup (N:) set to open their third-quarter earnings season on Tuesday. Goldman Sachs (N:), Bank of America (N:) and Wells Fargo (N:), as well as Morgan Stanley (N:), will report later in the week.
The bets that more U.S. stimulus is on the horizon come despite signs that negotiations in Washington have stalled again, leading the Trump administration to call on Congress to pass a less ambitious coronary relief bill.
A White House spokesman said Monday that U.S. Senate Republicans have said they will go along with the coronavirus relief legislation President Trump wants.
Tensions between Beijing and Washington are also under scrutiny after the White House pushed ahead with three advanced weapons sales to Taiwan, sources familiar with the situation said Monday.
The moves ahead of the U.S. election could anger China, which views Taiwan as a rebellious province.
Investors are also keeping a close eye on the resurgence of global cases of coronavirus after British Prime Minister Boris Johnson announced a new restrictive regime for parts of England on Monday. Lawmakers are set to vote on the move on Tuesday.
Gold was 0.35 percent lower at $1,915.36 an ounce.
In the energy market, oil prices slid after the lifting of force majeure at Libya’s largest oil field, the end of strikes affecting production in Norway and the start of production resumption by U.S. producers in the wake of Hurricane “Delta”.
In Asian trade, Brent crude oil () was up 0.05% at $41.71/bbl. U.S. West Texas Intermediate crude () also climbed to $39.41.