Asian Stocks Hit By Rising COVID-19 Cases, US Stimulus Concerns

Asian stocks markets fell on Tuesday as soaring global coronavirus cases and slow progress on a US stimulus deal hammered investor sentiment and took a toll on Wall Street.

MSCI's gauge of Asia Pacific stocks outside Japan was down 0.43 per cent, with Australia's ASX 200 off 1.1 per cent to an almost three-week low.

China's CSI300 Index edged down 0.1 per cent, as investors looked out for any news from a meeting of China's Communist Party leaders to set the next five-year plan.

Data out earlier in the day also showed China's industrial profits grew at a slower pace in September, suggesting a recovery in the manufacturing sector is yet to be bedded-in.

In Japan, the benchmark Nikkei 225 dropped 0.28 per cent in morning trade while Hong Kong's Hang Seng index was down 1.02 per cent.

US indices fell sharply overnight to open the week's trading, as anxiety over new record daily COVID-19 cases in the United States, Russia and France weighed on investor appetite.

Adding to the gloom, White House economic adviser Larry Kudlow told reporters on Monday that talks over a coronavirus relief package have slowed, though House Speaker Nancy Pelosi remained hopeful an agreement can be reached before the November 3 elections.

Many Senate Republicans have resisted legislation of a scope that Pelosi and Mnuchin have discussed, totaling around $2 trillion.

"The challenge for markets is that in most cases they are already pricing a very strong economic bounce. The new outbreaks, and the potential for a double-dip recession, directly contradict this assumption," Michael McCarthy, chief market strategist at CMC Markets in Sydney.

National polls give Democrat Joe Biden a solid lead over president Donald Trump but the contest is much tighter in battleground states that could decide the outcome.

The sharp stock market decline set a bleak tone ahead of a busy third-quarter earnings season, with large US tech firms like Apple Inc, Amazon.com Inc and Google-parent Alphabet Inc set to report. Microsoft Corp reports its results Tuesday.

The Dow Jones Industrial Average fell 2.29 per cent overnight, the S&P 500 lost 1.86 per cent, while the Nasdaq Composite dropped 1.64 per cent.

The dollar was holding largely steady, moving just a touch lower to trade at 92.951 against a basket of six major currencies.

Much of the trading in currency markets, as well as other asset markets, was buffeted by the renewed coronavirus fears.

In early Asia, oil prices managed to staunch an extended sell-off though the outlook was weak due to the virus-induced worries over demand.

Brent crude was up 12 cents, or 0.3 per cent, at $40.58 a barrel by 0039 GMT (6:09 am in India), having dropped more than 3 per cent overnight. US oil was up 13 cents, or 03 per cent, at $38.69 a barrel, after also declining more than 3 per cent on Monday.

The safe-haven spot gold added 0.3 per cent to $1,907.41 an ounce Tuesday morning.