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Vaccine Worries, Asian Markets Drop

The Asian stock markets are mostly lower on Wednesday following negative cues overnight from Wall Street amid uncertainty about a new stimulus bill, as House Speaker Nancy Pelosi and the White House struggles to reach an agreement on a broad relief package.

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Investors’ sentiment further dampened following the news that U.S. health regulators have paused Eli Lilly’s late-stage trial of its antibody treatment for COVID-19 due to potential safety concerns. Earlier, Johnson & Johnson had paused a late-stage trial of its COVID-19 vaccine candidate because of participants’ unexplained illness.

The Australian market was little changed after gains in recent sessions and after negative cues overnight from Wall Street. The investors also digested mixed earnings results from local companies.

Benchmark S&P/ASX 200 Index was lower by 3.40 points or 0.05% to 6,19230 after touching a low of 6,174.70 earlier. The broader All Ordinaries Index was down under 1.70 points or 0.03% to 6,398.50. Australian stocks rose for a seventh straight session on Tuesday.

Westpack, National Australia Bank, ANZ Banking, and Commonwealth Bank were lower in a range of 1.1 percent to 1.7 percent.

The Bank of Queensland reported a 61 percent fall in profit for the full year, slashed its annual dividend, and announced the sale of its St. Andrew’s Insurance business for A$23 million to private investment firm Farmcove Investment Holdings. The bank’s shares gained more than 4 percent.

Among major miners, Rio Tinto slid 0.4%, while Fortescue Metals dipped 0.2%. BHP Group edged up 0.1%.

The gold miners are weak after gold prices had snapped on a three-day winning streak to close lower overnight. Newcrest Mining declined more than 1 percent, whereas Evolution Mining was down almost 1 percent.

Oil stocks declined, even as crude oil prices rose overnight. Woodside Petroleum lost more than 2%, while Oil Search and Santos were lower by more than 1% each.

In the tech sector, Afterpay rose almost 3%. Appen advanced by almost 1%.

Afterpay stated that Australian regulator AUSTRAC would not take further action on the company as an external auditor report was found by Afterpay to be a ‘low-risk business’ for money laundering.

A CSL reported a more than 9 percent increase in its full-year net profit after tax. It narrowed its profit outlook for the next year. Biotech’s shares are advancing more than 1%.

Australia will be seeing October results for the consumer confidence index from Westpac today. The Japanese market declined, while the safe-haven yen strengthened.

The benchmark Nikkei 225 Index was down 73.06 points or 0.31% to 23,528.72, after falling to a low of 23,518.81 earlier. Japanese stocks closed modestly higher on Tuesday.

Market heavyweight SoftBank Group advanced more than 1%. Fast Retailing added 0.5 %.

Major exporters were lower on a stronger yen. Panasonic and Canon lost more than 2% each, while Mitsubishi Electric and Sony are declining more than 1% each.

In the banking sector, Sumitomo Mitsui Financial lost almost 2% and Mitsubishi UFJ Financial declined more than 1%. Automakers, Toyota, and Honda were down more than 1% each.

J Front Retailing gained more than 4%, while Cyberagent and M3 were higher by more than 2% each.

Thus, Seiko Epson, JGC Holdings, Pacific Metals, Konica Minolta, and Alps Alpine all lost more than 4% each, while Mitsui E&S Holdings was lower by almost 4%.

Based on the currency market, the U.S. dollar traded in the lower 105 yen-range on Wednesday. As elsewhere in Asia, Shanghai, South Korea, Singapore, Malaysia, and Taiwan were also lower, while New Zealand, Indonesia, and Hong Kong were modestly higher.

From Wall Street, stocks were closed lower on Tuesday following a strong upward move seen over the past several sessions. Pullbacks may partly have reflected profit-taking and uncertainty about a new stimulus bill, as House Speaker Nancy Pelosi and the White House struggled to reach an agreement on a broad relief package. Negative sentiments were also generated in reaction to the news that Johnson & Johnson had paused a late-stage trial of its COVID-19 vaccine candidate due to a participant’s unexplained illness.

The tech-heavy NASDAQ edged down just 12.36 points to 0.1% to 11,863.90. The Dow slid 157.71 points or 0.6% to 28,679.81, and the S&P 500 fell 22.29 points or 0.6% to 3,511.93.

European markets also moved to the downside on Tuesday. While the German DAX Index slumped by 0.9%, the French CAC 40 index and the U.K.’s FTSE 100 Index slid by 0.6% and 0.5%, respectively.

Crude oil prices rose sharply on Tuesday, lifted by data showing a notable jump in Chinese crude oil imports in the month of September. The WTI crude for November delivery climbed $0.77 or about 2% to $40.20 a barrel.

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