Home Stock & Shares Asia-Pacific markets fall on coronavirus revival fears

Asia-Pacific markets fall on coronavirus revival fears

by Jonathan Adams
coronavirus

South Korea’s Kospi led losses in the region, dropping 2.37% in afternoon trade as shares of automaker Hyundai Motor fell more than 3%

Stocks in Asia-Pacific dropped in Friday afternoon trade after an overnight plunge on Wall Street amid fears of a second wave resurgence of the coronavirus pandemic.

South Korea’s Kospi led losses among the region’s major markets, dropping 2.37% in afternoon trade as shares of automaker Hyundai Motor fell more than 3%. The Kosdaq index also declined around 2%.

In Hong Kong, the Hang Seng index dropped 1.3% by the afternoon as shares of HSBC fell more than 2%. Mainland Chinese stocks also edged lower, with the Shanghai composite down 0.38% while the Shenzhen component slipped 0.437%.

In Japan, the Nikkei 225 shed 0.74% while the Topix index fell 1.17%.

Meanwhile, Australia’s S&P/ASX 200 declined 1.88%.

Overall, the MSCI Asia ex-Japan index traded 1.51% lower.

The market needed a breather, Shaw and Partners’ Senior Investment Adviser Adam Dawes told CNBC’s “Street Signs” on Friday. We’re really confident and comfortable with a pullback because … it’s somewhat needed going forward.

For the Australian market and for Asia markets this is a really good pullback, Dawes said. It’s now starting to give us some good opportunities to pick up some stocks that we’ve missed out previously.

Investor reaction to the overnight drop stateside, which saw stocks suffering their biggest one-day plunge since March, was watched on Friday. The Dow Jones Industrial Average plunged 1,861.82 points, or 6.9%, to close at 25,128.17. The S&P 500 slid 5.9% to 3,002.10 while the Nasdaq Composite dropped 5.3% to end the day at 9,492.73

Yesterday’s new infection numbers brought the total number of  US COVID19 cases to above two million, with a number of localised hotspots — 18 states are seeing an increase, including Arizona, Florida, Texas and parts of California. And globally, Wednesday’s new case load of 135,000 is the highest daily tally to date, Ray Attrill, head of foreign exchange strategy at National Australia Bank, wrote in a note.

Whether the latest COVID-19 news is fanning concerns about fresh lockdowns with all that entails for economic activity, or (and perhaps more realistic, in the US at least) a more extended period of cautious consumer behaviour, it is doubtless a factor behind the sharp falls in stocks, Attrill said.

Oil prices recovered from some of their earlier losses but continued to trade lower in the afternoon of Asian trading hours, with international benchmark Brent crude futures down 1.32% to $38.04 per barrel. U.S. crude futures also slipped 1.6% to $35.76 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 96.838 after rising from levels around 96 earlier.

The Japanese yen traded at 107.15 per dollar after seeing an earlier high of 106.57. The Australian dollar was at $0.6843 after plunging from levels above $0.696 observed in the previous trading day.

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