Asia-Pacific markets fall as investors keep an eye on Brexit talks, U.S. stimulus hopes
- Markets in Australia, Japan and South Korea struggled for gains.
- Investors kept an eye on Brexit trade talks as well as ongoing negotiations in the U.S. for a coronavirus relief package.
- A three-hour meeting between U.K. and European Union leaders on Wednesday evening failed to break an impasse in Brexit trade talks.
SINGAPORE — Asia-Pacific markets declined Thursday morning as investors kept an eye on Brexit trade talks as well as ongoing negotiations in the U.S. for a coronavirus relief package.
The Nikkei 225 in Japan fell 0.39% after market open while the Topix index dropped 0.17%. South Korea's Kospi index tumbled 1.11%.
In Australia, the benchmark ASX 200 fell 0.56%, with all sectors in the red. The energy subindex declined 1.05% as oil stocks struggled for gains.
The session in Asia-Pacific follows overnight declines on Wall Street. U.S. stock futures were little changed after market close.
"Elevated levels of event risk surrounding the EU-UK trade talks … and ongoing negotiations on a fresh US stimulus package in Washington continued to dampen market volatility," Rahul Khare from ANZ Research wrote in a morning note.
A three-hour meeting between U.K. and European Union leaders on Wednesday evening failed to break an impasse in Brexit trade talks. British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed that a firm decision should be made by Sunday about the future of the talks, media reports said citing a senior Downing Street source.
The U.K. left the EU in January but agreed to keep the same standards and regulations until the end of the year. That was intended for both sides to have time to develop new trading arrangements. The transition period is due to end in three weeks and there are growing concerns that a new agreement may not be ready by then.
The British pound fell 0.17% to $1.3373 on Thursday during Asian trading hours while the euro was relatively flat at $1.2080.
Across the pond, negotiations for a coronavirus relief bill continued in the U.S. as the Covid-19 crisis worsens in the country.
Still, investor sentiment in recent days has improved on the back of Pfizer's vaccine rollout in the U.K.
Currencies and oil
The U.S. dollar index, which measures the greenback against a basket of its peers, last traded at 91.087, climbing from an earlier level around 90.693.
"(The dollar) strengthened overnight because of concerns that a US fiscal stimulus package may not be forthcoming," Kim Mundy, senior economist and currency strategist at the Commonwealth Bank of Australia, wrote in a morning note.
The greenback "can strengthen further in the near-term if Democrats and Republican's cannot agree on the size and nature of a new fiscal aid package this year," Mundy said, adding, "However, the distribution of vaccines starting this month improves the medium-term economic outlook and can limit near-term (dollar) upside."
The Japanese yen changed hands at 104.28 per dollar, staying relatively flat. Elsewhere, the Australian dollar also moved little, trading fractionally lower at $0.7440.
Oil prices rose slightly on Thursday during Asian trading hours. U.S. crude was up 0.33% at $45.67 a barrel.
Global benchmark Brent ended the previous session at $48.86.
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