(Bloomberg) -- Asian stocks headed for the first back-to-back weekly drop in two months amid a global selloff as investors grew increasingly anxious before next week’s U.S. presidential election and Tokyo shares sank for a second day.
The MSCI Asia Pacific Index fell 0.9 percent to 136.67 as of 4:10 p.m. in Hong Kong, set for a 1.5 percent decline this week. Japan’s Topix index lost 1.6 percent as it resumed trading after a holiday, capping its worst week in four months. The S&P 500 Index is on its longest slump since 2008, falling for an eighth day Thursday, as investors awaited Friday’s payrolls report for further evidence that the U.S. economy can bear higher borrowing costs.
Democrat Hillary Clinton, who is holding on to a narrow lead over Republican Donald Trump in most polls, has seen her position tested after the Federal Bureau of Investigation reopened a probe into an unauthorized e-mail server. A Bank of America Corp. gauge tracking volatility expectations in global stocks, bonds, currencies and commodities has climbed for seven straight days through Wednesday, the longest streak since December 2013. As central banks prepare to pare back stimulus, the Bank of England said it’s no longer expecting to cut interest rates this year.
“Markets have reacted with cautiousness to political uncertainty,” said Jasper Lawler, a London-based analyst at CMC Markets Plc. “Investors are not panicking, but have been paralyzed into inaction.”
The MSCI Asia Pacific Index is poised for its first consecutive weekly drop since the start of September, as Clinton’s commanding lead in opinion polls dwindled. Fresh polls released Thursday put her only slightly ahead of Trump, while a New York Times/CBS poll found Clinton with a 45 percent chance of winning and Trump 42 percent, tighter than her nine-point lead in the same poll in mid-October.
Investors have also weighed meetings this week at the Bank of Japan and the Federal Reserve, with both standing pat on monetary policy. The Fed signaled it was ready to raise U.S. borrowing costs at its meeting next month.
The Topix index posted its first weekly drop in three weeks. The yen traded at 103.26 per dollar after capping a third day of advances on Thursday. More than 130 Topix companies were scheduled to report earnings Friday. Of the firms that have already posted results and for which Bloomberg has estimates, about two-thirds missed projections for sales while about half fell short of predictions for profit.
Indonesian shares climbed 0.1 percent for their first gain in four days, paring a weekly drop. Thousands of protesters crowded Jakarta’s streets in a rally organized by Muslim groups to demand that the Christian governor of Jakarta face jail over claims he insulted the Koran. About 18,000 riot police and military personnel were deployed to the capital for the march on the presidential palace.
Australia’s S&P/ASX 200 Index lost 0.9 percent. New Zealand’s S&P/NZX 50 Index fell 1 percent after entering a correction this week, tumbling 11 percent from its 2016 peak in September. Singapore equities slumped for a sixth day to a June low. Indian stocks headed for a four-month low as health-care companies tumbled amid a U.S. probe on producers of generic drugs.
South Korea’s Kospi index slipped 0.1 percent after touching the lowest level since July on Wednesday amid a scandal over influence-peddling allegations that’s engulfing President Park Geun-hye. Hong Kong’s Hang Seng Index lost 0.2 percent and the Shanghai Composite slipped 0.1 percent. The Hang Seng China Enterprises index added 0.1 percent.
Philippine stocks rose 0.9 percent to end a nine-day slump. The stock gauge entered a correction on Wednesday after falling more than 10 percent from a July peak.
Genting Singapore Plc surged 11 percent, the largest gain among shares on the MSCI Asia Pacific Index, after earnings at the casino operator topped estimates.
E-mini futures on the S&P 500 traded little changed. The CBOE Volatility Index rose for an eighth day through Thursday, its longest streak of gains since 2013. The measure of market turbulence known as the VIX jumped 70 percent in that time, to its highest level since the aftermath of the Brexit vote.