* U.S. gridlock on stimulus deal dents share prices
* Russia vaccine news triggers escape from safe-haven assets
* Value-oriented shares bought back globally
By Hideyuki Sano and Lawrence Delevingne
TOKYO/BOSTON, Aug 12 (Reuters) - Asian stocks dipped on
Wednesday on growing uncertainty over whether the U.S. lawmakers
would agree on an additional round of big fiscal stimulus to
support an economy still struggling with the novel coronavirus.
Hopes of vaccine development, however, prompted some
investors to reduce safe-haven assets such as gold and
government bonds, and to buy back battered stocks of companies
hit hardest by the virus.
The mixed sentiment has led to choppy trade in Asia with the
index of ex-Japan Asia-Pacific shares shedding 0.76%
.MIAPJ0000PUS while Japan's Nikkei .N225 gained 0.2%.
On Wall Street, the S&P 500 snapped a seven-day winning
streak after coming within reach of its all-time peak hit in
February just before the global outbreak of the COVID-19.
The declines came as political gridlock between the
Republican White House and congressional Democrats over
coronavirus relief continued for a fourth day, with each party
blaming the other for intransigence. Barring a bipartisan deal, the U.S. economy could be left
with measures U.S. President Donald Trump called for on Saturday
through executive orders to bypass Congress. "We have enormous uncertainty. It appears it's getting
harder for both sides to compromise as the election is
nearing... Trump's proposals would be smaller than markets have
expected. There's question over whether they are viable, too,"
said Junpei Tanaka, strategist at Pictet.
The U.S. election campaigns look set to gather steam after
Democratic presidential candidate Joe Biden selected Senator
Kamala Harris as his choice for vice president. E-mini futures for S&P500 ESc1 were little changed after
the news.
The 10-year U.S. Treasuries yield dipped 2 basis points to
0.636% US10YT=RR in Asia after hitting a one-month of 0.661%
in previous U.S. trade.
On top of hedge selling ahead of the largest-ever 10-year
note auction later in the day, bonds have lost some of their
safe-haven allure also on rising hopes of vaccines against
COVID-19.
President Vladimir Putin said on Tuesday that Russia had
become the first country to grant regulatory approval to a
COVID-19 vaccine after less than two months of human testing.
While Moscow's decision raised some eyebrows, the news
lifted hope some of the vaccines currently in development would
become available earlier than expected. Investors bought back hospitality industries stocks and
other value-oriented shares, leading the old-economy centric Dow
Jones .DJI to outperform high-flying Nasdaq .IXIC .
Globally, MSCI Value .MIWD0000VPUS has risen 1.5% while
MSCI Growth .MIWD0000GPUS lost 1.3% so far this week.
"As countries around the world seek to support the economy
without harsh measures like lockdowns, investors are reviewing
if they can keep value shares underweight," said Naoya Oshikubo,
senior economist at Sumitomo Mitsui Trust Asset Management.
The most dramatic move took place in gold XAU= , which
suffered its biggest daily fall in seven years on Tuesday. On
Wednesday, it fell another 1% to $1,891.
Still, Michael Hsueh, Commodities & FX Strategist at
Deutsche Bank in New York said, there is a good chance this
week's decline will attract fresh buyers.
"In today's instance, the vaccine news is likely not
sufficient to change the macro narrative, insofar as it is seen
as a medical mistake in advancing too quickly through testing
procedures," he said, referring to the Russian vaccine.
Major currencies were little changed, with the euro almost
flat at $1.1728 EUR= and the yen also moving little at 107.27
per dollar JPY= .
The New Zealand dollar slipped 0.4% NZD=D4 after the
country locked down Auckland following four new cases of
COVID-19 and the country's central bank took a dovish stance.
Oil prices were little changed, with Brent LCOc1 up 0.2%
at $44.60 a barrel. U.S. crude CLc1 was up 0.1% at $41.66.
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