Asian markets fall as fears of second wave dent confidence
Asian markets fell on Thursday as spiking coronavirus cases and prospects of new lockdowns shook earlier confidence about a global economic recovery.
Optimism about a quick economic comeback has been tempered by more global cases of coronavirus, with a fresh outbreak in Beijing and rising infections in US states that are reopening after lockdowns helping drive Asian markets lower.
Japan’s Nikkei 225 closed 0.35 per cent down, while Hong Kong’s Hang Seng index lost 0.52 per cent. The Shanghai Composite index was narrowly in the green, adding 0.14 per cent.
Australia’s ASX 200 closed 0.90 per cent down after the country reported a larger-than-expected decline in employment for May, with the unemployment rate climbing almost one per cent.
MSCI’s broadest index of Asia Pacific equities excluding Japan climbed 0.37 per cent.
“A cautious tone has re-emerged in markets amid a quiet night for data,” said Tapas Strickland, a director at the National Australia Bank.
“Markets are still trying to grapple with the implications of rising coronavirus infections and hospitalisation rates in the southern parts of the US given there is a high bar to re-impose lockdowns.”
Texas yesterday reported an 11 per cent increase in coronavirus hospitalisations, the biggest one-day increase since 4 June.
China is strengthening containment measures in Beijing following a cluster of new coronavirus cases, including cancelling flights.
Brian Battle, trading director at Performance Trust Capital Partners, warned that markets remained “very sensitive to headline risk”.
“Don’t confuse lack of volatility with stability. The market is very unstable with news of the virus outbreak worsening, which could lead to less global trade. But news of no second coronavirus wave in the US. could lead to a smoother recovery.”