WASHINGTON, June 18 — Asian stocks were set to dip today after a choppy Wall Street session as spiking coronavirus cases and prospects of new lockdowns erased earlier confidence about a global economic recovery.
Optimism about a quick economic comeback has been tempered by more global cases of the coronavirus, with an outbreak in Beijing and a rising infections in US states that are reopening their economies.
“A cautious tone has re-emerged in markets amid a quiet night for data,” Tapas Strickland, a director at the National Australia Bank, said in a note. “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.”
Australian S&P/ASX 200 futures were down 0.6 per cent, while Japan’s Nikkei 225 futures were off 0.02 per cent.
Hong Kong’s Hang Seng index futures were down 0.23 per cent.
US Treasury yields edged lower and crude prices fell on concerns over the fresh outbreaks, but drew some support from stimulus measures and positive tests of a drug trial for dexamethasone that could save some critically ill Covid-19 patients.
The dollar rose from early lows as investors wary of wider geopolitical risks sought its relative safety, but pared gains by the session’s end.
Rising tensions between North Korea and South Korea spurred demand for safe-havens, as did clashes between Indian and Chinese troops at a disputed border site.
“This can all change as the market is very sensitive to headline risk,” said Brian Battle, the trading director Performance Trust Capital Partners in Chicago.
“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.”
On Wall Street, The Dow Jones Industrial Average fell 0.65 per cent while the S&P 500 lost 0.36 per cent.
Both US indexes opened modestly higher, waffled throughout the morning and turned positive in afternoon. By the final hour of trading, however, both indexes had slipped.
The Nasdaq Composite, which continued to trade higher before paring its gains, added 0.15 per cent, by the closing bell.
The pan-European STOXX 600 index closed up 0.74 per cent while emerging market stocks rose 0.48 per cent.
Oil prices swung in and out of the red amid an increase in US crude inventories.
The dollar index rose 0.11 per cent, with the euro down 0.05 per cent to US$1.1237 (RM4.81). The Japanese yen strengthened 0.06 per cent versus the greenback at 106.91 per dollar, while Sterling was last trading at US$1.2547, down 0.06 per cent on the day.
Benchmark 10-year notes yielded 0.7331 per cent, from 0.733 per cent late yesterday. The 10-year German Bund rose 0.7 basis point to yield -0.418.
US crude recently fell 0.55 per cent to US$37.75 per barrel, while Brent was flat on the day.
US gold futures gained 0.05 per cent to US$1,730.00 an ounce. — Reuters
