Asia Pacific Stocks Expected to Trade Mixed Following See-Saw U.S. Session

The major Asia-Pacific stock indexes are expected to open flat to lower on Tuesday after a mixed session on Wall Street, as investors continued to weigh the prospects for a fiscal coronavirus spending package and the likelihood for further COVID-19-related economic restrictions.

According to Bloomberg, futures were little changed in Japan and Hong Kong, and dipped in Australia. In the U.S., the benchmark S&P 500 Index fell for a fourth session, capping its longest slide since September and is 1.5% below its December 8 record.

In the states, drugmakers led the NASDAQ 100 Index higher after Alexion Pharmaceuticals Inc. agreed to be bought by AstraZeneca Plc, Bloomberg reported. Energy producers tumbled after OPEC cut its demand forecast. Oil was lower most of the day before reversing.

Bloomberg also said that investor optimism about the start of vaccine shots has given way to concern over whether a stimulus bill from a bipartisan group of lawmakers would gain traction after its release later. The virus continued to rage in the U.S., threatening harsher restrictions across the nation, and European governments are also tightening measures. New York City Major Bill de Blasio warned that people should be prepared for a full shutdown.

“Signs of market fatigue are more prevalent today than a month ago, even as the popular average is near all-time highs,” wrote Paul Nolte, a portfolio manager at Kingsview Investment Management. “The much-awaited correction could come as investors tire of Washington, worry about the COVID cases over the holidays, or some other concern that is likely to pass in a few months.”

Monday Recap

Stocks in Asia-Pacific were mixed in Monday’s trade, as investors in the region reacted to the approval of Pfizer’s COVID-19 vaccine.

In Japan, the benchmark Nikkei 225 Index gained 0.3% to close at 26, 732.44 while the Topix index rose 0.48% to end its trading day at 1,790.52.

The Bank of Japan’s quarterly tankan survey showed on Monday business sentiment in Japan improving in the three months to December. The headline index for big manufacturers’ sentiment improved to minus 10 as compared with minus 27 in September. A median market forecast had expected the figure to come in at minus 15, according to Reuters.

Hong Kong-listed shares of Alibaba and Tencent dropped on Monday, declining 2.63% and 2.89%, respectively.

Alibaba Group and Tencent Holdings-backed China Literature were among firms set to be fined 500,000 Yuan each ($76,467) by China’s market regulator for failing to report deals properly for anti-trust reviews, according to a Monday announcement. China Literature’s stocks in Hong Kong fell 4.12% on Monday.