HSI Heads North Despite Snag With US Stimulus Talks

Hong Kong shares finished with more gains on Wednesday after US President Donald Trump called off stimulus talks in his country but urged lawmakers to pass legislation providing targetted help to Americans and businesses in the world's top economy.

The Hang Seng Index rose 1.09 percent, or 262 points, to 24,242.

Mainland Chinese markets were closed for a public holiday.

Asian markets fluctuated, with Seoul up 0.9 percent and Sydney putting on more than 1 percent thanks to a huge tax-cutting budget by the Australian government late Tuesday.

There were also gains in Mumbai, Singapore, Taipei and Wellington, but Tokyo, Manila and Jakarta were in the red.

The US president halted discussions just as lawmakers appeared to be making progress after months of haggling, sparking a sell-off on Wall Street which had been rallying on hopes for a breakthrough to help the beleaguered economy.

Just hours earlier, Federal Reserve boss Jerome Powell had warned that failure to reach an agreement would cause "unnecessary hardship" for Americans, while analysts said it would have a major impact on the crucial consumer sector that is the major driver of growth.

Emily Weis, a strategist at State Street Corp., told Bloomberg TV: "The market rally thus far had really been driven by this unprecedented stimulus from both central banks and governments globally and a large part of that was from the US."

The timeline on more American fiscal stimulus "has now been pushed further back".

With Joe Biden well ahead in national and battleground polling, markets have been pricing in the likelihood he will take the White House, with Democrats possibly winning both houses of Congress.

Analysts said such a scenario could see a much bigger stimulus passed, albeit not until after January's inauguration.

Edward Moya at OANDA said: "Trump's decision only delays fiscal stimulus and will likely be met with some further accommodation by the Fed.

"Fiscal stimulus will happen, and Wall Street is still counting on a blue wave (of Democrats winning across the board) that will deliver a huge spending plan that will keep the risky assets supported all of next year."

Oil prices tumbled after Trump's announcement, with investors worried about the impact on Americans' demand, while data showing a jump in US stockpiles added to the concerns. (AFP)