Asian shares slide, fol­low­ing Wall Street sell­off on virus fears

Iran Daily - - Global Economy -

Shares fell Mon­day in Asia, track­ing losses on Wall Street as ris­ing virus cases cause some US states to back­track on pan­demic re­open­ings.

Tokyo’s Nikkei 225 in­dex lost 1.3 per­cent in early trad­ing. Shares also fell in Hong Kong, Syd­ney, Shang­hai and South Korea. In­vestors have been bank­ing on busi­nesses con­tin­u­ing to re­open, help­ing to drive a re­cov­ery from the worst global down­turn since the 1930s Great De­pres­sion, AP re­ported.

But the S&P 500 fell 2.4 per­cent Fri­day as Texas and Florida re­versed course and clamped down on bars again in the na­tion’s big­gest re­treat yet. The new coro­n­avirus has surged back in many places, es­pe­cially the Amer­i­can South and West.

Con­cern has deep­ened as the num­ber of con­firmed cases topped 10 mil­lion, with more than 500,000 re­ported dead from COVID-19, ac­cord­ing to a tally by Johns Hop­kins Univer­sity that is be­lieved to un­der­state the prob­lem due to is­sues with test­ing and a large num­ber of asymp­to­matic cases.

The Nikkei 225 lost 297.39 points to 22,214.69 while the Hang Seng in Hong Kong dropped 0.9 per­cent to 24,327.28. The Kospi in Seoul fell 1.4 per­cent to 2,104.06 and Aus­tralia’s S&P/ASX 200 gave up 1.6 per­cent to 5,809.50. The Shang­hai Com­pos­ite lost 0.6 per­cent to 2,962.02. Shares also fell in Tai­wan and Sin­ga­pore.

Even as virus out­breaks flare, eco­nomic data, which lag such daily mea­sures of the pan­demic, are sig­nal­ing a re­cov­ery, al­beit a frag­ile one.

“Con­flict­ing the COVID-19 spread and eco­nomic data con­tinue to keep risk sen­ti­ment, and con­se­quently mar­kets, in a grid­lock go­ing into the end of June,” said Jingyi Pan of IG. “As far as the week­end leads are con­cerned, how­ever, the top­ping of the 10 mil­lion mark for global COVID-19 cases had tipped the scale in the di­rec­tion of risk-off for mar­kets on Mon­day.”

China re­ported that prof­its of ma­jor in­dus­trial com­pa­nies rose 6 per­cent in May from a year ear­lier, to 582.3 bil­lion yuan ($82.3 bil­lion) as de­mand re­cov­ered and costs re­mained rel­a­tively low. That was up from a 4.3 per­cent drop in April.

China’s oil re­fin­ers and other heavy in­dus­tries have prof­ited from fall­ing prices for crude and other com­modi­ties as global de­mand has waned amid the pan­demic. But prof­its fell more than 19 per­cent in Jan­uary-may, the Na­tional Bu­reau of Sta­tis­tics re­ported.

Stocks on Wall Street skid­ded Fri­day as ris­ing in­fec­tions and reim­posed new precaution­s to con­tain out­breaks in­jected fresh jit­ters into a mar­ket that has rid­den high since April, for the most part, on hopes for a swift re­cov­ery.

The S&P 500 fell 74.71 points to 3,009.05, though it is still on pace for its best quar­ter since 1998. The Dow Jones In­dus­trial Av­er­age had its worst day in two weeks, los­ing 2.8 per­cent to 25,015.55. The Nas­daq, which hit an all-time high ear­lier this week, dropped 2.6 per­cent to 9,757.22.

Fi­nan­cial com­pa­nies were among the big­gest de­clin­ers af­ter the Fed­eral Re­serve or­dered many of the na­tion’s big­gest banks to sus­pend buy­backs of their stock and cap div­i­dend pay­ments for sev­eral months.

The num­ber of con­firmed new coro­n­avirus cases per day in the US has blasted past 40,000, ac­cord­ing to the Johns Hop­kins tally, eclips­ing the mark set dur­ing the dead­li­est stretch in late April. Deaths and hos­pi­tal­iza­tions have been ris­ing in parts of the coun­try, es­pe­cially in the South and West.

The stock mar­ket is likely to re­main volatile as traders weigh the ups and downs in the tra­jec­tory of the pan­demic.

Re­flect­ing cau­tion over that out­look, the yield on the 10-year Trea­sury note dropped to 0.64 per­cent from 0.65 per­cent. The yield tends to move with in­vestors’ ex­pec­ta­tions for the econ­omy and in­fla­tion and had been above 0.7 per­cent for most of last week.

Con­cern that a pull­back in the re­open­ing of busi­nesses could ham­per de­mand for en­ergy is pulling oil prices lower. Bench­mark US crude oil for Au­gust de­liv­ery lost 62 cents to $37.87 per bar­rel in elec­tronic trad­ing on the New York Mer­can­tile Ex­change. It fell 23 cents on Fri­day to set­tle at $38.49 a bar­rel.

Brent crude oil for Au­gust de­liv­ery slipped 58 cents to $40.35 per bar­rel.

In cur­rency deal­ings, the dol­lar bought 107.17 Ja­panese yen, down from 107.20 yen on Fri­day. The euro was trad­ing at $1.1245, up from $1.1221.

EU­GENE HOSHIKO/AP A woman walks past an elec­tronic stock board show­ing Ja­pan’s Nikkei 225 in­dex at a se­cu­ri­ties firm in Tokyo on June 29, 2020.

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