China stocks slip, Hong Kong market erases losses amid market volatility, US stimulus impasse before election

Major stock gauges in Asia-Pacific slipped while Hang Seng Index received a late boost from casino, bank stocks

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Stock prices are reflected on the screen outside a brokerage in the city. Most Asian stocks fell amid impasse on US stimulus package as volatility rises before the presidential election Photo: Handout

Published: 11:25am, 22 Oct 2020Updated: 4:59pm, 22 Oct 2020

China stocks slipped while the Hang Seng Index rebounded from earlier losses to extend a rally amid concerns about political tension and US stimulus impasse before the presidential election on November 3.

The CSI300 Index, which tracks the biggest companies in Shanghai and Shenzhen, declined 0.3 per cent to 4,777.98. The Hang Seng Index ended with 0.1 per cent gain at 24,786.13 as casino and bank stocks helped stabilise the market from earlier losses.

Asian stocks followed US markets lower with steep losses in Japan and South Korea on speculation talks for a trillion-dollar virus-relief package will not be ready before the poll. At the same time, the US also accused Iran and Russia of trying to interfere with its presidential election.

“With investors suffering a severe case stimulus talk exhaustion, more and more market participants opt for the sidelines to avoid the steam rollers known to the pancake markets in low volume conditions,” said Stephen Innes, a strategist at Axi. “The pre-election fiscal stimulus‘s odds continue to look very low.”

The US yesterday designated another six lesser known Chinese media as “foreign missions” in another sign of escalation in political tension leading up to the election.

Vaccine producers were the biggest losers. Shanghai Fosun Pharmaceutical Group shed 5.2 per cent per cent. Shenzhen Kangtai Biological Products dropped 4.8 per cent.

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