Global retreat over Delta persists
The selling has also been blamed on other factors including lingering worries about possible central bank policy tightening as the economy recovers
Asian equities extended losses Tuesday following another rough day for global markets as the fast-spreading Covid Delta variant fuels concerns over the expected economic recovery.
The Philippine market paused yesterday for the Muslim Feast of Sacrifice or Eid’l Adha.
Investors have been rattled in recent weeks by data showing the highly transmissible virus surging across the world, forcing some governments to reimpose containment measures.
Even countries with elevated vaccination rates have seen a big increase in new cases, though observers point out that hospitalizations and deaths are being kept down thanks to the jabs.
The selling has also been blamed on other factors including lingering worries about possible central bank policy tightening as the economy recovers, profit-taking with markets sitting around record or multi-year highs, and investors jockeying as the corporate earnings season begins.
Bubbling geopolitical tensions were also an influence after the United States accused Beijing of carrying out a massive hack of Microsoft and charged four Chinese nationals, while rallying allies in a rare joint condemnation of “malicious” cyber activity. China has denied the claims as “totally groundless and irresponsible,” and “fabricated” by Washington.
Spikes in most markets
“What is likely concerning markets now is that there is also a surge in infections occurring in developed markets with high levels of vaccination,” said National Australia Bank’s Tapas Strickland.
This showed “that fully vaccinated people while being protected from severe cases and hospitalisation, can still transmit the virus.”
“Virus restrictions may need to be in place for longer (or even re-introduced) until vaccination rates lift further and full vaccination is available to everyone who wants it,” Strickland added.
Wall Street’s three main indexes all ended deep in the red, with the Dow shedding more than two percent while the Nasdaq and S&P 500 were more than one percent off.
And the selling filtered through to Asia, where Tokyo suffered a fifth straight loss, while Shanghai, Hong Kong, Sydney, Seoul, Mumbai, Bangkok, Wellington and Taipei were also well in retreat.
London, Paris and Frankfurt all rose more than one percent in opening trade, a day after each losing more than two percent.