Investing.com – Asian stocks were mostly up on Monday morning, boosted by positive data from China but with investors jitters over the overall global economic recovery from COVID-19 and the U.S. presidential election on Nov. 3 capping gains.
China’s Shanghai Composite was down 0.27% by 10:19 PM ET (2:19 AM GMT), while the Shenzhen Componentwas up 0.88%. Data released earlier in the day showed that the Caixin manufacturing Purchasing Managers Index (PMI) for October rose to 53.6, ahead of the predicted 53 in forecasts prepared by Investing.com. The data follows the growth also seen in the manufacturing and non-manufacturing PMIs, released on Saturday, which rose to 51.4 and 56.2 respectively. The manufacturing PMI was slightly down from September’s reading of 51.5. The Caixin services PMI is due later in the week.
Hong Kong’s Hang Seng Index was up 0.39%.
The U.K. became the latest country to announce restrictive measures, with a second lockdown to begin later in the week, Prime Minister Boris Johnson said on Sunday. The measures come as the U.K. saw more than 20,000 cases daily, with over 10 million cases in Europe alone.
Across the Atlantic, the U.S. saw a daily death toll of up to 1,000 people. The incessantly rising numbers of COVID-19 cases, uncertainty over a tight U.S. election, Congress’ failure to pass the latest stimulus measures ahead of Nov. 3, and the gloomy corporate outlook are all dampening investors’ risk appetite.
Ahead of the last campaign weekend, Republican President Donald Trump trails Democratic challenger Joe Biden in national opinion polls partly because of widespread disapproval of Trump’s handling of the coronavirus.
Although opinion polls still show that Democrat candidate Joe Biden is ahead of incumbent president Donald Trump, some investors were wary of predicting the election outcome as a contested election could still be possible.
“It’s going to be a big week with the U.S. election on Tuesday being the main event … the U.S. election has tightened further over the last week, making it harder to call,” AMP (OTC:AMLTF) economist Shane Oliver told Reuters.
“The tightening is likely weighing on shares as it implies an increased risk of a contested election and less chance of substantial post-election fiscal stimulus to the extent that a blue wave that sees the Democrats win the presidency, control of the Senate and the House may be somewhat less likely,” he added.
Other investors agreed with Oliver.
“Whichever way you look at it, this coming week will be huge for U.S. and global markets … we see the potential for a sharp rise in volatility around these events, and all in the context of a still deteriorating COVID-19 situation across much of the U.S., Europe and elsewhere,” First Abu Dhabi Bank Pjsc. chief economist Simon Ballard told Bloomberg
Meanwhile, the U.S. Federal Reserve will hand down its policy decision on Thursday.