Home Stock & Shares Asian shares fall as Covid resurgence hits oil demand

Asian shares fall as Covid resurgence hits oil demand

by Jonathan Adams
Asian shares

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.08%, Australian stocks fell 0.56%, and stocks in Tokyo tumbled 1.95%

Asian shares and U.S. stock futures fell on Wednesday as concern about a resurgence of coronavirus cases in some countries cast doubt on the strength of global growth and demand for crude oil.

European stocks looked set for a more promising start, however, with Euro Stoxx 50 futures up 0.28%, Germany’s DAX futures up 0.25%, and Britain’s FTSE futures up 0.15%. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.08%. Australian stocks fell 0.56% but shares in China recouped early losses and added 0.29% due to positive earnings from the healthcare and banking sectors.

Stocks in Tokyo tumbled 1.95% due to the growing likelihood that Tokyo, Osaka, and surrounding areas will be put on lockdown due to a new wave of coronavirus infections. S&P 500 e-mini stock futures also lost 0.18%.

Crude futures extended declines from a one-month high on speculation that coronavirus restrictions in India, the world’s third-largest oil importer, will hurt energy demand. Recent optimism about rising vaccination rates in the US, Britain, and Europe is shifting to concern that record coronavirus infections in India and the reinforcement of travel restrictions will act as a brake on the global economy.

Renewed concerns about the global economic recovery weighed on commodity prices and commodity currencies. Many countries around the world, such as India and Brazil, set new records for infections and deaths, analysts at Commonwealth Bank of Australia said in a research note. As long as the virus persists, there is a risk virus mutants develop and spread to other countries.

Declines in Asian shares followed a downbeat day on Wall Street. The Dow Jones Industrial Average shed 0.75%, the S&P 500 declined 0.68%, and the Nasdaq Composite lost 0.92% on Tuesday as investors sold airlines and travel-related shares due to fear of delayed recovery in global tourism. Some tech shares and companies that benefited from stay-at-home demand could face further pressure after Netflix Inc reported disappointing subscriber growth for its movie streaming service, which sent its shares down 11% in after-hours trading.

MSCI’s index of global shares shed 0.3%. U.S. crude declined 0.69% to $62.24 a barrel, while Brent crude dropped 0.59% to $66.18 per barrel.



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