Asian equities and U.S. equities futures fell on Wednesday as concerns over a resurgence of coronavirus cases in some countries cast doubt on the strength of global growth and demand for crude oil.
MSCI’s broader Asia-Pacific stock index outside of Japan (.MIAPJ0000PUS) fell 0.6%. Australian shares (.AXJO) fell 1.25% and China shares (.CSI300) were down 0.46%.
Shares in Tokyo (.N225) plunged 1.79% on the increasing likelihood that Tokyo, Osaka and surrounding areas will crash due to a new wave of coronavirus infections.
S&P 500 e-mini stock futures also fell 0.18%.
Crude futures extended declines from a month-high in Asian trade on speculation that coronavirus restrictions in India, the world’s third-largest oil importer, will affect energy demand. read more
Recent optimism about rising vaccination rates in the United States, Britain, and Europe is shifting to concerns that record-breaking coronavirus infections in India and tightening travel restrictions will act as a brake on the global economy. .
“Renewed concerns about the global economic recovery weighed on commodity prices and commodity currencies. Many countries around the world, including India and Brazil, have set new records for infections and deaths,” said analysts at the Commonwealth Bank of Australia in a research note.
“As long as the virus persists, there is a risk that mutants of the virus will develop and spread to other countries.”
The declines in Asian stocks followed a bearish day on Wall Street. The Dow Jones Industrial Average (.DJI) fell 0.75%, the S&P 500 (.SPX) lost 0.68% and the Nasdaq Composite (.IXIC) fell 0.92% on Tuesday as investors they sold airline shares and travel fears of a delayed recovery in world tourism.
Some stocks and tech companies that benefited from the “ stay-at-home ” demand could face increased pressure after Netflix Inc. (NFLX.O) reported disappointing subscriber growth for its movie streaming service, which caused its shares to drop 11% in after-hours trading. read more
US crude fell 0.4% to $ 62.42 a barrel, while Brent crude fell 0.26% to $ 66.40 a barrel.
India, the world’s second-most populous country and a major energy consumer, reported its worst daily death toll on Tuesday, with much of the country now under lockdown.
The loonie, the Mexican peso and the Norwegian krone stabilized during Asian trading after falling on Tuesday, but analysts say the currencies of major oil exporters are likely to continue falling if energy prices continue to fall.
The dollar index against a basket of six major currencies traded near a seven-week low, hit by a drop in US Treasury yields as some investors sought the security of holding government debt.
Investors are closely watching a 20-year Treasury auction later on Wednesday, which will be an important indicator of global demand for fixed income.
Before the auction results, the benchmark 10-year Treasury yield was trading at 1.5660%, close to a six-week low. 20-year Treasury yields stood at 2.1531%, close to a seven-week low.
In a sign of growing risk aversion, spot gold was trading at $ 1,778.18 an ounce, close to a seven-week high reached Monday.
Our Standards: The Thomson Reuters Trust Principles.