SINGAPORE/NEW YORK (Reuters) – Asian stock markets edged higher on Wednesday, brushing off Wall Street’s weaker finish, which came after U.S. President Donald Trump abruptly broke off economic stimulus negotiations with lawmakers.
Trump cancelled talks with Democrats in a Tweet saying that negotiations will stop until after the election, when he promises a major stimulus bill.
That sent Wall Street tumbling and safe assets like the dollar and bonds higher. Investors in Asia, however, seemed less rattled, holding a view that stimulus would be delayed rather than derailed.
MSCI’s broadest index of Asia-Pacific shares outside Japan crept 0.2% higher to a fresh two-week peak, led by a 0.8% gain in Australia where an expansionary budget lifted stocks.
Broad gains in Hong Kong lifted the Hang Seng 0.7% while Japan’s Nikkei fell 0.2%.
S&P 500 futures wobbled either side of flat, finding some support from Trump tweets seeming to promise backing for individual pieces of fiscal stimulus. The dollar was steady at its highest level for the week so far. Oil prices slid and the strong dollar squashed gold to a one-week low.
“There are a couple of ways we still get stimulus, but none of them occur before the election now,” said ING’s chief economist in Asia, Rob Carnell, since both contenders are promising it.
“One way or another we’re going to get some stimulus, it’s just we’re not going to get it now – so we’ll tread water for a bit.”
China’s stock, bond and currency markets are closed for holidays until Oct. 9.