Asia shares fall over Senate runoffs in Georgia

Published On: January 5, 2021Categories: Stocks & Shares1.5 min read

MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.05%, Australian stocks dropped 0.26%

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 fell 0.05%, pulling back from a record high. Australian stocks fell 0.26%.

Chinese shares erased early losses and rose 0.52%. In Hong Kong, China Mobile, China Unicom, and China Telecom rallied by more than 6% after the New York Stock Exchange abandoned plans to delist the companies’ shares from its bourse.

Japanese shares 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.

U.S. S&P 500 stock futures edged up 0.03%. Euro Stoxx 50 futures were down 0.39%. German DAX futures fell 0.34%, and FTSE futures 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.

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, Knightley said.

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

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

The MSCI’s broadest gauge of global stocks was unchanged, sitting just below a record reached in the previous session.

About the Author: Jonathan Adams

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