A rally in global stocks lost pace on Thursday as investors seeking signs of further coronavirus economic support measures paused for breath ahead of an important European Central Bank decision.
In afternoon trading in the Asia-Pacific region, Japan’s benchmark Topix index gained 0.3 percent while South Korea’s Kospi edged 0.4 percent higher. China’s CSI 300 of Shanghai- and Shenzhen-listed stocks and Hong Kong’s Hang Seng index both slipped 0.1 percent.
Overnight in the US, the S&P 500 closed up 1.4 percent to notch a fourth consecutive day of gains as economic data showed an improved global picture from April. Futures tipped the S&P 500 to slip 0.1 percent when trading begins on Wall Street later in the day.
The loss of momentum for Asian equities came ahead of the ECB’s monetary policy meeting on Thursday, which will focus on economic growth projections for the eurozone and the possible extension of the bank’s €750bn bond-buying program.
The ECB is widely expected to extend the program, which at its current pace of about €30bn a month will run out of firepower by October.
Marchel Alexandrovich, a senior European economist at Jefferies, said that while “there is no immediate need to announce further [monetary easing] for a few months yet, neither is there a reason to delay the inevitable, and a €500bn boost . . . will confirm the ECB’s commitment to staying active in the markets into next year”.
Futures tipped the Euro Stoxx 50 index to shed 0.1 percent when trading begins in Europe. The benchmark has climbed more than 40 percent from its nadir in March, and the current rally in global equity markets has shown little sign of reversing course, despite a growing menu of risks.
Euro Stoxx 50 SHORT (Sell)
ENTER AT: 3251.1