HONG KONG (AFP) - Asian markets fluctuated on Wednesday (Oct 7) after Donald Trump called off talks on a much-needed stimulus before urging lawmakers to agree on handouts for struggling Americans and help for small businesses.

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.

The president accused Democratic House Leader Nancy Pelosi of negotiating in bad faith and said he had asked Senate Majority Leader Mitch McConnell to instead focus on confirming his appointed judge to an opening on the Supreme Court.

"Nancy Pelosi is asking for $2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19," he tweeted, citing an incorrect figure for the Democrats' latest proposal.

"We made a very generous offer of $1.6 Trillion Dollars and, as usual, she is not negotiating in good faith. I am rejecting their request, and looking to the future of our Country."

He added that after the election, which he said he would win, "we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business".

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".

There was hope for some form of help for struggling Americans, however, when he tweeted he would immediately sign a Congressional bill guaranteeing a second round of US$1,200 handouts and US$135 billion for small businesses - which were already included in the negotiations.

He also urged lawmakers to approve US$25 billion to support the floundering aviation industry.

"So there is still some stimulus perhaps coming before the election," Ben Emons, at Medley Global Advisors, said.

"That is removing the angst from the Trump tweet earlier that no further negotiations about the stimulus package would take place."

Wall Street futures rebounded after the latest tweets.

'UNNECESSARY HARDSHIP'

Earlier on Tuesday, Powell had repeated his oft-made call for a new stimulus to go alongside the trillions in financial support pledged by the Fed.

"Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses," Powell said. "Even if policy actions ultimately prove to be greater than needed, they will not go to waste."

Still, while Asian markets fell immediately after opening, many recovered and were mixed in later trade.

Hong Kong and Seoul each rose 0.9 per cent, while Sydney put on more than one per cent 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.

London and Frankfurt opened slightly higher, while Paris was lower.

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.