Shares in the Asia-Pacific region followed Wall Street lower as a new wave of global coronavirus infections unsettled investors less than a week ahead of the US presidential election.
Japan’s benchmark Topix index fell 0.5 per cent, South Korea’s Kospi shed 1.4 per cent and Australia’s S&P/ASX 200 fell 1.3 per cent. In China, the CSI 300 index of Shanghai- and Shenzhen-listed shares fell 0.4 per cent, while Hong Kong’s Hang Seng index dropped 1.8 per cent.
The declines came after US stocks suffered their biggest one-day loss since June, with the S&P 500 dropping 3.5 per cent and the tech-focused Nasdaq Composite down 3.7 per cent.
The US on Wednesday reported its third-largest one-day jump in coronavirus cases and more than 1,000 deaths. Polls show US President Donald Trump losing ground in key Midwestern battleground states where coronavirus cases are surging ahead of the election on Tuesday.
Falls for US equities followed a 3 per cent tumble for Europe’s Stoxx 600 and a 2.8 per cent drop for the FTSE 100 on Wednesday after Germany and France announced further restrictions to slow the latest wave of coronavirus cases.
“The main driver of markets today is rising anxiety over the rise in Covid-19 cases in Europe,” said Robert Carnell, head of Asia-Pacific research at ING.
Mr Carnell said there was little evidence that the tightening measures being adopted in Germany and France would succeed in stamping out the virus. “If it doesn’t work, the restrictions will only get tighter.”
Futures markets pointed to a rebound for US stocks when Wall Street opened later in the day, although thin trading during Asian hours can exacerbate volatility for US and European stock futures. The S&P 500 was tipped to rise 1 per cent, while the FTSE 100 was expected to climb 0.4 per cent.
“Market sentiment is turning with investors buffeted by US election uncertainty and now economic worries from rising Covid-19 cases across Europe, sparking concerns that measures to control the virus will hamper economic activity,” said Kerry Craig, global market strategist at JPMorgan.
But Mr Craig added that investors “should stay focused on the longer-term economic recovery, which still looks solid”.
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October 29, 2020 at 10:00AM
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Asian stocks fall as US and European Covid cases surge - Financial Times
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