Advertisement

Asia stocks drop as virus spikes, China data fails to lift gloom

Asian markets fell Thursday as investors fretted over fresh spikes in virus infections around the world and the reimposition of lockdowns, while forecast-busting economic growth data out of China was unable to break through the unease on trading floors.

An investor looks at screens showing stock market movements at a securities company in Nanjing in China's eastern Jiangsu province on July 6, 2020. - Shanghai stocks surged on July 6 to a more than two-year high as investors piled in following a combination of rosy predictions for the market and strong economic data. (Photo by STR / AFP)
While markets have been rallying since hitting their low points in March -- thanks to government support and the easing of lockdowns -- traders have had to juggle hopes for economic recovery with the reality of a deadly virus that is sweeping the globe and seeing fresh spikes in some countries.

Geopolitical tensions, particularly between China and the United States, were also fanning uncertainty.

Beijing said the world's top economy expanded 3.2 percent in the second quarter, much better than the 1.3 percent tipped in an AFP poll of economists, indicating China is well on the road to recovery after months of lockdowns that caused a first-quarter contraction.

However, while the reading was welcomed, analysts said investors had largely priced a recovery into prices and pointed to a worse-than-expected drop in retail sales in June -- a small rise had been forecast -- suggesting consumers are still reticent about spending.

The retail sector has taken on an increasingly crucial role in China's economy as leaders look for consumers, rather than trade and investment, to drive growth.

"No matter how much stimulus and fiscal sugar you try to entice consumers with, they will not leave their apartment and go on a spending spree until they feel confident the landscape is virus-free," said AxiCorp's Stephen Innes.

In early trade, Shanghai and Hong Kong were down one percent apiece, while Tokyo fell 0.5 percent and Sydney shed 0.4 percent.

Seoul dropped 0.7 percent and Singapore was off 0.3 percent while Wellington and Taipei were also in the red.

Investors are growing increasingly worried about a surge in infections in several countries that had been reopening their economies confident they had controlled or tempered their outbreaks.

California has reimposed containment measures including closing bars and restaurants in the richest US state, while others have followed similar measures. 

Elsewhere, the easing of lockdown restrictions seen as key to kick-starting economic recoveries were being reversed or put on hold, such as in Hong Kong, Australia, Japan and India.

- Key figures around 0250 GMT -

Tokyo - Nikkei 225: DOWN 0.5 percent at 22,831.96 (break)

Hong Kong - Hang Seng: DOWN 1.0 percent at 25,291.67

Shanghai - Composite: DOWN 1.0 percent at 3,328.41

West Texas Intermediate: DOWN 0.5 percent at $40.98 per barrel

Brent North Sea crude: DOWN 0.4 percent at $43.60 per barrel

Euro/dollar: DOWN at $1.1402 from $1.1410 at 2100 GMT

Dollar/yen: UP at 106.95 yen from 106.92 yen

Pound/dollar: DOWN at $1.2557 from $1.2589

Euro/pound: UP at 90.80 pence from 90.62 yen

New York - Dow: UP 0.9 percent at 26,870.10 (close)

London - FTSE 100: UP 1.8 percent at 6,292.65 (close)

Topics: Stocks , China , Asian Trade , Tokyo
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by manilastandard.net readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of manilastandard.net. While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.
AdvertisementGMA-Working Pillars of the House
Advertisement