Asian shares slide as virus casts shadow over recovery
Shares have fallen in Asia after Wall Street closed lower for a second straight day, led by drops in technology companies and banks
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Shares skidded in Asia on Wednesday after Wall Street closed lower for a second straight day, led by drops in technology companies and banks.
Worsening coronavirus outbreaks in Asia have cast a shadow over prospects for a rebound from the pandemic. Tokyo’s Nikkei 225 fell more than 2% and other benchmarks also declined.
On Tuesday, the S&P 500 gave back 0.7%, pulling the index further below the record high it set on Friday. Small-company stocks, which have been beating the rest of the market in recent months, fell more than other sectors.
Asian governments are scrambling to secure supplies of COVID-19 vaccines after seeing infection numbers surge in recent weeks. The rising caseloads are straining medical systems from Japan to India and leading to a restoration of pandemic precautions such as travel restrictions, quarantine requirements and a dimming of nightlife.
The Nikkei 225 in Tokyo gave up just over 2.0% to 28,508.55 while Hong Kong's Hang Seng declined 1.7% to 28,655.76. In Seoul, the Kospi lost 1.5% to 3,171.66, while Sydney's S&P/ASX 200 shed 0.3% to 6,997.50. The Shanghai Composite index ended flat at 3,472.93.
“Global stocks are still plumbing the lows after renewed virus concerns spooked markets overnight," Stephen Innes of Axi said in a commentary.
Worsening outbreaks in India and Thailand have also cast a pall on a recovery in travel, which in turn is clouding the outlook for oil and fuel prices, he said.
On Wednesday the S&P 500 closed at 4,134.94. The Dow Jones Industrial Average lost 0.8% to 33,821.30. After shedding an early gain, the technology-heavy Nasdaq slid 0.9%, to 13,786.27.
Apple fell 1.3% as part of a broad slide in technology companies. Banks also accounted for a big share of the selling, which came as bond yields fell, reversing course after moving higher on Monday.
The yield on the 10-year Treasury fell to 1.57% from 1.60%. Bank of America dropped 2.8% and Citigroup slid 3.2%.
Investors have turned defensive, favoring utilities, real estate stocks and a mix of companies that make consumer staples like food and household products. General Mills rose 1.6% and Clorox added 3%.
The market has been swaying between gains and record highs to pullbacks as investors weigh solid economic growth against the risks still posed by the pandemic. That push and pull will likely continue as vaccine distribution rolls on and various industries reopen.
“Overall, we’re going to have some volatility in the market this year, but everything to me looks fairly rosy for the next six months or so,” said Sylvia Jablonski, chief investment officer at Defiance ETFs.
The Russell 2000 index of smaller company stocks, which has been outpacing the broader market all year, shed 2% to 2,188.21.
Investors are in the middle of first-quarter earnings season. Roughly 80 members of the S&P 500 will report their results this week, as well as one out of every three members of the Dow. Wall Street will be looking to see if Corporate America is recovering with the rest of the economy from the coronavirus pandemic.
On average, analysts expect quarterly profits across the S&P 500 to climb 24% from a year earlier, according to FactSet.
Netflix slumped 10.6% in after-hours trading after the video streaming pioneer said it added 4 million more worldwide subscribers from January through March, its smallest gain during that three-month period in four years. That was about 2 million fewer than both management and analysts had predicted Netflix would add during the first quarter.
In other trading, benchmark U.S. crude oil lost 20 cents to $62.47 per barrel in electronic trading on the New York Mercantile Exchange. It gave up 76 cents to $62.67 per barrel on Tuesday. Brent crude, the international standard, declined 15 cents to $66.42 per barrel.
The U.S. dollar declined to 108.07 Japanese yen from 108.09 yen late Tuesday. The euro fell to $1.2019 from $1.2035.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.