Asian shares fall on fears virus outbreaks are rebounding
Shares were mostly lower in Asia on Monday on concern over a resurgence of coronavirus cases and pessimism after Wall Street posted its worst week in nearly three months.
Benchmarks in Tokyo, Sydney and Shanghai fell after China reported an outbreak of new infections in Beijing and reimposed precautions to prevent it from spreading.
Stocks are turning wobbly as investors re-evaluate their expectations for economic growth, which many skeptics have been saying were overly optimistic.
Case numbers are still growing in various nations, including emerging economies, and without a vaccine, relaxing lockdowns and reopening travel could bring on further waves of COVID-19 cases.
Japan’s benchmark Nikkei 225 dropped 0.6% to 22,180.58. South Korea’s Kospi slipped 0.2% to 2,127.15. Australia’s S&P/ASX 200 shed nearly 0.4% to 5,826.80. Hong Kong’s Hang Seng slid 0.6% to 24,157.08, while the Shanghai Composite was little changed at 2,919.41.
Once again, the pandemic has triggered cause for fear and doubt about the road ahead, Hayaki Narita at Mizuho Bank said in a commentary.
Rising COVID-19 cases in Latin American and parts of Asia, re-emerging second wave risks in parts of the US, South Korea and China and so-called cluster cases in Japan were adding to worries, he said.
The illness has continued to spread in countries that make up about 60% of the global GDP, noted Robert Carnell, regional head of research Asia-Pacific at ING.
If globally, we are still in wave 1, then it is possible that without a vaccine, the big-wave is still lying out there somewhere waiting to hit, he said.
On Wall Street Friday, the S&P 500 rose 1.3% a day after dropping nearly 6% in its biggest rout since mid-March.
It lost 4.8% for the week, snapping a three-week winning streak for the benchmark index.
Small-company stocks and bond yields rose, meaning investors were a bit more willing to take on risk again a day after the sell-off.
That interrupted what had been a dramatic rally for the market as stocks sold off for three straight days as a rise in COVID-19 cases in the US and a discouraging economic outlook from the Federal Reserve dashed investors’ optimism that the economy will recover relatively quickly as states lift stay-at-home orders and businesses reopen.
The Dow Jones Industrial Average rose 1.9%, to 25,605.54 and ended the week with a 5.6% loss after slumping nearly 7% on Thursday.
The Nasdaq, which climbed above 10,000 points for the first time on Wednesday, gained 1% to 9,588.81. The Russell 2000 index of smaller companies gained 2.3%, to 1,387.68.
Despite the uncertainty, stocks have mounted a historic comeback in the past couple of months, with the S&P 500 rallying 44.5% between late March and Monday, erasing most of its losses tied to the pandemic.
Benchmark US crude oil lost 95 cents to 35.31 a barrel in electronic trading on the New York Mercantile Exchange.
It fell 8 cents to settle at 36.26 a barrel Friday. Brent crude oil, the international standard, fell 68 cents to 38.05 a barrel.
The dollar inched down to 107.19 Japanese yen from 107.37 yen. The euro fell to 1.1259 from 1.1303.
