Asian shares decline on jitters over fresh outbreaks of coronavirus cases overshadowed hopes of reopening economies

Shares were mostly lower Tuesday in Asia as worries over fresh outbreaks of coronavirus cases overshadowed hopes over reopening economies

The Associated Press May 12, 2020 12:51:45 IST
Asian shares decline on jitters over fresh outbreaks of coronavirus cases overshadowed hopes of reopening economies

Bangkok: Shares were mostly lower Tuesday in Asia as worries over fresh outbreaks of coronavirus cases overshadowed hopes over reopening economies.

Japan's benchmark ended lower after briefing logging gains, while shares fell in Hong Kong, Shanghai and Sydney. That followed a mixed session on Wall Street, where gains for technology and health care stocks helped offset more prevalent losses elsewhere.

Optimism over plans for reopening in many countries after shutdowns aimed at battling the pandemic has taken some hits from reports of new waves of infections in states and countries that are further ahead in lifting lockdown measures. Investors pointed to small but disconcerting increases of infections in South Korea, China and elsewhere.

President Donald Trump insisted Monday his administration has “met the moment” and “prevailed” on coronavirus testing, even as the White House ordered everyone who enters the West Wing, apart from Trump, to wear a mask after two aides tested positive for COVID-19 late last week.

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Representational image. Reuters.

On Monday, Vice President Mike Pence and three of the nation's top medical experts were in various states of isolation as a precaution.

“All said, risk appetite is on the wane today. And that merely acknowledges that re-opening economies is riddled with risks; struggling between the devil and the deep blue sea," Hayaki Narita of Mizuho Bank said in a commentary.

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China reported that auto sales fell again in April but losses narrowed in a sign the industry's biggest global market is recovering from the coronavirus pandemic as Beijing eases anti-disease controls.

Sales of SUVs, sedans and minivans in the industry's biggest global market were down 2.6 percent from a year earlier at 1.5 million, said the China Association of Automobile Manufacturers, an improvement over March's 48.4 percent contraction and a nearly 82 percent plunge in February.

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The industry group said the market shows “obvious signs of recovery.” But that news and reports of stronger growth in lending did little to lift sentiment. The Shanghai Composite index fell 0.3 percent to 2,887.58. Hong Kong's Hang Seng lost 1.4 percent to 24,251.09.

Japan's Nikkei 225 edged 0.1 percent lower to 20,366.48. South Korea's Kospi gave up 0.4 percent to 1,927.13.

Australia's S&P/ASX 200 sank 1.2 percent to 5,396.60 after the country's treasurer said the country faces a “sobering” economic outlook due to the effects of the coronavirus and will have its largest-ever deficit when a revised budget is released in October.

Shares also fell in Taiwan, Singapore and Jakarta, while Bangkok gained 0.5 percent.

The future for the S&P 500 dropped 0.4 percent while that for the Dow industrials also fell 0.4 percent.

An uptick in cases in South Korea has added to concern over the potential for rebounds in new coronavirus infections in places that relax restrictions. More than 100 new cases were reported that were linked to bars and clubs, 64 of them in the capital Seoul.

China reported only one new case on Tuesday, but that followed double-digit increases over the previous two days that set off renewed warnings to the public to not to become overconfident.

Fresh data reports this week include US unemployment claims and retail sales and Australian jobs. So far, the economic indicators streaming in have been oppressively bad.

Many companies are reporting first-quarter earnings, often opting to give no financial forecasts due to overwhelming uncertainty over what lies ahead.

That was true of Toyota Motor Corp., whose shares fell 2.1 percent on Tuesday as it reported its net profit dropped nearly 90 percent in the January-March quarter from a year earlier, though it said it expected a recovery as the pandemic is brought under control.

Overnight, the S&P 500 ended the day at a virtual standstill, up just 0.52 points at 2,930.32, rallying back from a 0.9 percent loss in the morning. The Dow Jones Industrial Average fell 0.4 percent to 24,221.99, while the Nasdaq composite added 0.8 percent, to 9,192.34.

The yield on the 10-year Treasury was steady at 0.70 percent.

Benchmark US crude oil climbed 39 cents to $24.53 per barrel in electronic trading on the New York Mercantile Exchange. It fell 60 cents, or 2.4 percent, to settle at $24.14 a barrel on Monday. Brent crude oil, the international standard, added 27 cents to $29.90 per barrel. It dropped 4.3 percent to $29.63 a barrel in London.

The dollar fetched 107.45 Japanese yen, down from 107.66 late Monday. The euro rose to $1.0812 from $1.0807.

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