Asian markets weighed by virus spikes and stimulus gridlock

HONG KONG (AFP) – Most Asian markets fell yesterday following another disappointing performance on Wall Street with investors concerned about an uptick in coronavirus infections in Europe and the United States (US), as well as the lack of movement in Washington on a new stimulus.

After months of big gains around the world, fuelled by government stimulus and central bank largesse, equities are beginning to wobble, with analysts warning traders were taking profits as they consider the rally may have been overblown.

A key worry is a spike in new virus cases in key economies that have led to containment measures being reimposed.

Britain’s government, noting hospitalisation rates are doubling every eight days, said fresh restrictions could be put in place across England, with several cities already seeing some measures.

Health Secretary Matt Hancock said the country was at a “tipping point”.

Men walk by screens showing Japan’s Nikkei 225 index at a securities firm in Tokyo. PHOTO: AP

France has seen fatalities creep back up, and a million people in and around Madrid were under new “stay-at-home” orders.

New infection rates in the US are also picking up again after dropping for weeks.

“Investors remain confused about which way to move… as lockdown fears take charge with the United Kingdom (UK) government sounding alarm bells as the Covid-19 curve moves in the wrong direction,” said AxiCorp’s Stephen Innes.

“After the initial economic bounce from full-blown lockdowns, both the UK and Europe’s economic trajectory could be entering a gloomy second phase characterised by ongoing social distancing, elevated unemployment, and increasing damage to the supply side.”

Hong Kong led losses, dropping more than two per cent with market heavyweight HSBC tumbling around five per cent to a 25-year low on fears it could be added to a Chinese list of firms deemed a threat to national security and following news it had been accused of allowing fraudulent activity to go unpunished.