Asian shares drop amid worries over spreading COVID-19 cases

By: |
November 13, 2020 10:40 AM

Reports of surging COVID-19 cases have had a sobering effect on markets that had advanced on hopes for a vaccine and expectations that pro-business policies will continue after last week's US elections.

The trend is worsening in the US, in almost every state. In New York, for example, the state is ordering restaurants, bars and gyms to close at 10 pm, beginning Friday. (Photo source: Reuters)

Asian shares have opened lower as rising cases of coronavirus infections in the US, Europe and Asia add to worries that economies will once again be hamstrung by pandemic restrictions on travel and businesses. Reports of surging COVID-19 cases have had a sobering effect on markets that had advanced on hopes for a vaccine and expectations that pro-business policies will continue after last week’s US elections.

”It feels a bit deflated today as investors look to hunker down for what is bound to be a winter of discontent. But beyond the market concerns, 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,” Stephen Innes of Axi said in a report.

Japan’s benchmark Nikkei 225 sank 1.0% to 25,254.31. Australia’s S&P/ASX 200 fell 0.5% to 6,383.70. South Korea’s Kospi edged 0.2% lower to 2,471.26. Hong Kong’s Hang Seng slipped 0.8% to 25,958.49, while the Shanghai Composite dipped 1.3% to 3,294.57.

In Japan, where the pandemic had been relatively under control at fewer than 2,000 cumulative deaths, the number of reported daily cases nationwide reached a record for the country on Thursday, at more than 1,660 people. Especially affected were Tokyo and the northern island of Hokkaido, raising worries that a recent government campaign to discount domestic travel might have been a cause.

Outbreaks in many parts of the world have doused optimism over early results for a potential vaccine that had investors envisioning a possible return to normal. Such hopes have been tempered by a recognition that hurdles remain before the vaccine can become widespread, with medical workers and those with health risks likely getting access to such protection first.

Pessimism over scant chances the Democrats and Republicans will manage to reach agreement on further economic stimulus before the end of the year is another factor pulling shares lower, said Nobuhiko Kuramochi, market strategist at Mizuho Securities.

On the Tokyo Stock Exchange, issues related to real estate, transportation and energy were all falling, he said.
On Wall Street, the S&P 500 index fell 1%, to 3,537.01. The Dow Jones Industrial Average dropped 1.1% to 29,080.17 and the Nasdaq composite lost 0.7%, to 11,709.59.

The trend is worsening in the US, in almost every state. In New York, for example, the state is ordering restaurants, bars and gyms to close at 10 pm, beginning Friday.

New York was devastated by the virus earlier this year but seemed to have gotten it largely under control. In Europe, several governments have brought back even tougher restrictions that will likely restrain the economy.

Declines in US Big Tech stocks, which have held out well throughout much of the pandemic, helped pull the market lower. Microsoft and Facebook each slipped 0.5% on Wall Street. In energy trading, benchmark US crude lost 45 cents to $40.67 a barrel in electronic trading on the New York Mercantile Exchange. It lost 33 cents to $41.12 on Thursday. Brent crude, the international standard, fell 43 cents to $43.10 a barrel.

In currency trading, the US dollar edged down to 104.88 Japanese yen from 105.13 yen late Thursday. The euro cost $1.1810, up from $1.1803.

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