Asian markets struggle to digest coronavirus spike

Growing concerns over the coronavirus spread and simmering US-China tensions also weighed on oil.  — Reuters pic
Growing concerns over the coronavirus spread and simmering US-China tensions also weighed on oil. — Reuters pic

WASHINGTON, July 14 — Asian shares are showing a mixed picture today after a volatile day in US equity markets amid persistent concerns over the record number of new coronavirus cases worldwide and signs of an economic rebound.

Australian S&P/ASX 200 futures lost 0.76 per cent in early trading, Japan’s Nikkei 225 futures added 0.22 per cent, and Hong Kong’s Hang Seng index futures rose 0.39 per cent.

E-mini futures for the S&P 500 rose 0.21 per cent.

After a strong start in the United States, equity markets sold off when California announced it was slowing the state’s reopening, shutting bars and banning indoor restaurant dining statewide in response to a surge in coronavirus cases.

But at the same time, US consumers reported being more optimistic that the worst of their economic woes from the pandemic were behind them, complicating the picture for investors about the state of the world’s largest economy.

“The US continues to report fresh highs of daily new infections. However, the seriousness of the disease is falling. Hospitalisation rates...has trended down since April,” said Kim Mundy with the Commonwealth Bank of Australia in Sydney, in an analyst note. “The upshot is the surge in infections does not give the full story. And it suggests the US is learning to live with the disease.”

Tensions also grew between the US and China over disputed claims to offshore resources throughout the South China Sea, with US officials saying China’s claims were “unlawful.”

The US dollar edged lower yesterday as investors looked to US corporate earnings and upcoming retail data to gauge whether guarded optimism on the economic outlook was justified. Spot gold dropped 0.1 per cent to US$1,801.30 (RM7,682.54) an ounce.

Yesterday, the S&P 500 dropped 0.94 per cent after touching its highest level since February 24 earlier in the trading day. The tech-heavy Nasdaq Composite dropped 2.13 per cent, driven by declines in some outperforming big names, including Amazon and Microsoft. The Dow Jones Industrial Average rose 0.04 per cent.

MSCI’s gauge of stocks across the globe briefly touched its highest level since February, before ending down 0.29 per cent.

Growing concerns over the coronavirus spread and simmering US-China tensions also weighed on oil. Brent futures fell 52 cents, or 1.2 per cent, to settle at US$42.72 a barrel.

In upcoming data, China is set to report today its trade numbers, with slump in China’s exports likely easing in June while imports contracted less sharply on higher crude oil and commodities purchases, according to a Monday Reuters poll. — Reuters

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