Asian shares on the defensive as Covid-19 cases rise

Published On: January 28, 2021Categories: Stocks & Shares1.7 min read

MSCI’s broadest index of Asia-Pacific shares outside Japan was barely changed at 718.72, while Nikkei dropped 0.1 per cent

Asian shares were on the defensive on Monday as rising Covid-19 cases and doubts over the ability of vaccine makers to supply the promised doses on time soured risk appetite.

MSCI’s broadest index of Asia-Pacific shares outside Japan was barely changed at 718.72.

The benchmark is below the record high of 727.31 touched last week but up 8.5 per cent so far in January, on track for its fourth straight monthly rise.

Japan’s Nikkei fell 0.1 per cent.

Australian shares were higher after the country’s drug regulator approved the Pfizer/BioNTech Covid-19 vaccine with authorities saying a phased rollout will begin late next month.

Global Covid-19 cases are inching towards 100 million with more than 2 million dead, though financial markets have been buoyant on hopes of a vaccine and a quick economic revival.

However, “there was one negative Covid-19 news story after another on Friday and which equity investors ultimately couldn’t ignore,” said Ray Attrill, head of forex strategy at National Australia Bank.

Hong Kong locked down an area of the Kowloon peninsula on Saturday, the first such measure the city has taken since the pandemic began while some countries including Mexico recorded their highest daily case numbers.

Reports the new UK Covid variant was not only highly infectious but perhaps more deadly than the original strain also added to worries.

In the European Union, political leaders expressed widespread dismay over a hold-up by AstraZeneca and Pfizer Inc in delivering promised doses, with Italy’s prime minister lashing out at the vaccine suppliers, saying delays amounted to a serious breach of contractual obligations.

Pfizer, last week, said it was temporarily slowing supplies to Europe to make manufacturing changes that would boost output. On Friday, AstraZeneca said that initial deliveries to the region will fall short because of a production glitch.

Investors did see some hope in the United States after lawmakers agreed on Sunday that the most important priority should be producing and efficiently distributing a vaccine.

The Democrats and Republicans are discussing a new US$1.9 trillion in US coronavirus relief.

Financial markets have been eyeing a massive US economic stimulus though disagreements have meant months of indecision in a country suffering more than 175,000 Covid-19 cases a day with millions out of work.

About the Author: Jonathan Adams

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