Asian stocks under pressure as pandemic concerns outweigh stimulus hopes

WASHINGTON/HONG KONG: Asian stocks came under pressure on Tuesday as investors struggled to balance hopes for more economic stimulus and vaccines with anxiety over a surge in COVID-19 infections.

A mixed Asian open followed a similarly mixed Wall Street session with the tech-heavy Nasdaq Composite closing at a record high as investors flocked to mega-cap growth stocks, while the two other major US indices fell.

"You saw more than a slight moderation to the S&P 500, and the Dow, but you're still looking at these markets at record highs," said Tom Piotrowski, a market analyst with CommSec. "It's a matter of looking out for what the next catalyst is for these markets."

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.25%. Australia's S&P/ASX 200 inched up 0.23% as gold miners rose on strong bullion prices, though gains were capped by losses in energy stocks triggered by an overnight slump in oil prices.

Japan's Nikkei 225 narrowed its losses from early trade, down 0.27%, as Prime Minister Yoshihide Suga unveiled 73.6 trillion yen ($708 billion) in fresh economic stimulus measures, signalling his resolve to pull the country out of its coronavirus crisis-induced slump. Chinese blue-chips fell 0.2% while Hong Kong's Hang Seng were down 0.62%.

On Wall Street, the Nasdaq Composite rose 0.45% while the Dow Jones Industrial Average dropped 0.49% and the S&P 500 lost 0.19%.

Some investors are watching whether US policymakers can reinvigorate efforts to pass additional pandemic stimulus.

The US Congress is expected to vote this week on a one-week stopgap funding bill to give negotiators more time to strike a compromise, as the business community cautioned inaction could spur a deeper recession.

At the same time, California, the nation's most populous state, announced new restrictions on travel and business activity after record case numbers and hospitalizations.

And officials in New York warned similar restrictions could be employed soon, which further weigh on the nation's recovery.

The dollar slid against most currencies as investors eyed potential stimulus and vaccine development. An index that tracks the dollar against a basket of currencies was little changed at 90.889, not far from 90.471, its weakest since April 2018.

Sterling clung to hopes of a meeting between British Prime Minister Boris Johnston and European Commission President Ursula von der Leyen salvaging a Brexit trade deal.

The British currency was on edge but holding on at $1.3351 in the Asia morning session, well above Monday's low of $1.3225.

The yield on the benchmark 10-year notes rose slightly to 0.9327% on Tuesday.

Oil prices fell, adding to losses from the previous session.

Brent crude fell 0.68% and US crude dipped 0.59%. Prices came under pressure after Reuters reported the United States was prepping sanctions on at least a dozen Chinese officials over alleged roles in Beijing's disqualification of elected opposition legislators in Hong Kong.

Spot gold prices were 0.06% higher at $1,864.91 per ounce, and US gold futures settled up 0.25% at $1,870.6, as investors bet on more stimulus money being pumped into the financial system.