Asian Shares Retreat Ahead Of US Elections, Fed Meeting

Asian stocks fell across the board on Monday as hopes of an imminent U.S.-China trade deal faded and investors looked ahead to the U.S. mid-term elections as well as the FOMC meeting for directional cues.

China’s Shanghai Composite index ended the session down 0.41 percent at 2,665.43 despite President Xi Jinping praising globalization and China’s commitment to free trade.

On the data front, China’s private sector expanded at the weakest pace in more than two years in October with both services and manufacturing noting weaker performances, survey results from IHS Markit showed today.

The Caixin composite output index fell to a 28-month low of 50.5 from 52.1 in September.

Hong Kong’s Hang Seng index fell 2.08 percent to 25,934.39. The private sector in Hong Kong continued to contract in October, albeit at a slower pace, the latest survey from Nikkei showed with a PMI score of 48.6, up from 47.9 in September.

Japanese shares fell sharply in thin trading as caution set in ahead of U.S. mid-term elections. The Nikkei average ended down 1.55 percent at 21,898.99 after climbing 5 percent last week. The broader Topix index closed 1.11 percent lower at 1,640.39.

Gaming giant Nintendo gave up 2.7 percent after posting disappointing earnings last week. SoftBank shares ended 0.6 percent higher. After the market close, the company reported second-quarter profit that topped forecasts.

Bank of Japan Gov. Haruhiko Kuroda said today that the economy has clearly improved and the central bank will consider both positive and negative effects of its monetary policy in a balanced manner going forward.

Separately, domestic demand is expected to continue on an upward trend, while annual inflation is predicted to maintain its gradual climb to the target of 2 percent, the minutes from the Bank of Japan’s meeting on September 18 and 19 revealed.

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