electronic board displaying share prices on the Tokyo Stock
Exchange in Tokyo on November 4, 2020, as Asian markets react to
early predictions following the US presidential election.Behrouz
MEHRI / AFP
A spike in coronavirus infections across the United
States and Europe hit Asian markets again Friday as traders fear
another wave of lockdown measures will throw an already shaky
economic recovery off course.
The rally fuelled by excitement over a possible vaccine before
2021 and relief at Joe Biden’s US election win has given way to the
reality that while there is light at the end of the tunnel, the
killer disease remains rampant.
Several European economies including England and France have
already been all but shut down to contain a fresh eruption, but
they continue to record frighteningly high numbers of new cases —
raising the possibility the measures could be extended.
And major US cities including New York and Chicago are being
forced to act as leaders worry that the northern hemisphere winter
will be more deadly than spring.
This all means economies that had started to see signs of life
after a searingly bad first half of the year could stumble again,
with some observers indicating the world will see a so-called
W-shaped recovery.
Top US health adviser Anthony Fauci said while he was confident
vaccines would bring an end to the pandemic, it was crucial that
people “hang on and continue to double down on the public health
measures”.
All three main indexes on Wall Street finished in the red,
though the Nasdaq fared slightly better as tech firms benefit from
bets on people using gadgets while stuck at home.
Those losses seeped into Asia, where profit-taking also played a
role after a week-long rally.
Tokyo, Sydney, Singapore, Manila, and Mumbai were all in the
red, though there were gains in Seoul, Taipei, Wellington, and
Jakarta.
“Despite some truly remarkable news on the healthcare and
vaccine front this week, which saw investors cheer it to the
rafters… investors could not shake the sentiment-crushing aspects
of the continually soaring Covid-19 cases and the unpleasantries of
new economic restrictions,” said Axi strategist Stephen Innes.
– ‘Winter of discontent’ –
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“It feels a bit deflated today as investors look to hunker down
for what is bound to be a winter of discontent. The vaccine cannot
get here quick enough as what should be a festive time of the year
looks bound to be weeks of holiday gloom,” he added.
Hong Kong and Shanghai were also hit by news that Donald Trump
had signed an order banning Americans from investing in Chinese
firms that could help the country’s military and security
apparatus.
The executive order, due to take effect on January 11, said
Beijing obliges private firms to support these activities and
through capital markets “exploits United States investors to
finance the development and modernization of its military”.
The prohibition targets a list of 31 companies, including
telecoms, aerospace and construction firms, according to reports.
Among the firms on the list China Mobile plunged nearly six percent
in Hong Kong while China Telecom Corp dived nine percent.
Adding to the downbeat mood on trading floors are concerns that
a new US stimulus is unlikely to be passed before Biden moves into
the White House.
With Donald Trump continuing to reject defeat and concede,
reports said he has stepped back from talks on a new round of
spending for the beleaguered economy.
“This means that stimulus hopes now depend on the ability of
Senate Majority Leader Mitch McConnell and House Speaker Nancy
Pelosi finding common ground,” said National Australia Bank’s
Rodrigo Catril.
“But, notwithstanding the prospect of the US economic recovery
losing momentum as tougher social restrictions are introduced,
hopes of a big stimulus don’t look great.”
– Key figures around 0710 GMT –
Tokyo – Nikkei 225: DOWN 0.5 percent at 25,385.87 (close)
Hong Kong – Hang Seng: DOWN 0.3 percent at 26,080.54
Shanghai – Composite: DOWN 0.9 percent at 3,310.10 (close)
Euro/dollar: DOWN at $1.1806 from $1.1807 at 2230 GMT
Pound/dollar: UP at $1.3135 from $1.3118
Dollar/yen: DOWN at 104.99 yen from 105.10 yen
Euro/pound: UP at 89.98 pence from 89.96 pence
West Texas Intermediate: DOWN 1.4 percent at $40.54 per
barrel
Brent North Sea crude: DOWN 1.1 percent at $43.07 per barrel
New York – Dow: DOWN 1.1 percent to 29,080.17 (close)
London – FTSE 100: DOWN 0.7 percent at 6,338.94 (close)
-AFP
Read more https://swordpress.com.ng/2020/11/13/asia-markets-take-fresh-hit-as-covid-19-cases-surge/