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Asian Stocks Up Over Wait-And-See Whether U.S. Stimulus “Gets There”

·3 min read

By Gina Lee

Investing.com – Asia Pacific stocks were mostly up on Thursday morning, as the wait-and-see over whether the U.S. Congress will reach a consensus on the latest stimulus measures continues.

Japan’s Nikkei 225 inched up 0.09% by 9:56 PM ET (2:56 AM GMT), while South Korea’s KOSPI fell 0.64%.

In Australia, the ASX 200 rose 0.87%.

Hong Kong’s Hang Seng Index edged up 0.12%

China’s Shanghai Composite was up 0.33% while the Shenzhen Component was down 0.31%.

As negotiations for the stimulus measures continue in Congress, Senate Majority Leader Mitch McConnell declared on Wednesday, “we’re gonna get there.”

Investors are now waiting to see if McConnell, alongside Republicans and Democrats in Congress, will deliver. Both sides were reportedly “closing in on” approving a $900 billion stimulus bill on Wednesday and are also working to pass a $1.4 trillion spending bill for the fiscal year beginning on Oct. 1 by Friday to avert a government shutdown.

The U.S. Federal Reserve concluded its two-day policy meeting on Wednesday. In its policy decision handed down on the same day, the Fed strengthened its commitment to support the U.S. economy by promising to maintain its massive asset purchase program until it sees “substantial further progress” in employment and inflation. Fed Chairman Jerome Powell added that said the case for fiscal stimulus is “very, very strong” as the U.S. continues to grapple with a second wave of COVID-19 cases.

Some investors pointed out that the Fed’s policy decision disappointed some investors.

“Powell assured the world that the Fed will extend its asset purchase program if economic growth slows,” CMC Markets chief strategist Michael McCarthy told Reuters.

“The re-assurance saw the markets continue on their optimistic path,” he said, but added that some bond traders had been looking for more, prompting a selloff that steepened the U.S. curve.

Following the Fed, the Bank of England and the Mexican, Swiss and Indonesian central banks will hand down their policy decisions later in the day. The Bank of Japan and the Bank of Russia will hand down their decisions on Friday.

Meanwhile, the first known allergic reaction to BNT162b2, the COVID-19 vaccine developed by Pfizer Inc (NYSE:PFE) and BioNTech SE (F:22UAy), was reported in Alaska. Snarls have also begun to emerge for a massive rollout program for the jab, which could see thousands more healthcare workers inoculated.

Despite the challenges posed to an unprecedented immunization drive, Moderna Inc's (NASDAQ:MRNA) COVID-19 vaccine mRNA-1273 is widely expected to receive U.S. regulatory authorization within the week.

Some investors remained optimistic for the market's prospects.

“The 12-month outlook looks quite a bit better, because we have high conviction now that there is going to be mass vaccination … there’s not going to be as acute of a health crisis as we’re experiencing right now,” Nuveen chief investment strategist Brian Nick told Bloomberg.

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