Asian equities and US futures fell on Wednesday as concerns about the revival of coronavirus cases in some countries questioned the strength of global growth and demand for crude oil.
MSCI’s widest Asia-Pacific equities index outside Japan (.MIAPJ0000PUS) fell 0.6%. Australian equities (.AXJO) was down 1.25% and China (.CSI300) was down 0.46%.
Stocks in Tokyo (.N225) fell by 1.79% due to the increasing likelihood that Tokyo, Osaka and surrounding areas will be locked up due to a new wave of coronavirus infections.
S&P 500 e-mini-stock futures also fell 0.18%.
Crude contracts extend the month-on-month decline in Asian trade on speculation that coronavirus restrictions in India, the world’s third-largest oil importer, will hurt energy demand. read more
Recent optimism about rising vaccination rates in the United States, Britain and Europe is shifting to concerns that coronavirus infections in India and the strengthening of travel restrictions will hamper the global economy.
“Global concern about global economic recovery weighs on commodity prices and commodity currencies. Many countries around the world, such as India and Brazil, have set new records for infections and deaths,” Commonwealth Bank of Australia analysts said in a research note.
“As long as the virus persists, there is a risk that virus mutants will develop and spread to other countries.”
Decline in Asian equities follows a bad day on Wall Street. The Dow Jones Industrial Average (.DJI) fell 0.75%, the S&P 500 (.SPX) fell 0.68% and the Nasdaq Composite (.IXIC) fell 0.92% on Tuesday as investors airlines and travel-related shares sold for fear of a delayed recovery in global tourism.
Some tech stocks and companies that have benefited from the demand to stay home may face further pressure after Netflix Inc (NFLX.O) showed disappointing subscriber growth for its movie service, dropping its shares by 11% has in the after-hours trade. 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 second most populous country in the world and a major energy consumer, reported its worst death toll daily on Tuesday, with large parts of the country now locked up.
The Canadian dollar, the Mexican peso and the Norwegian krone rose during Asian trading after falling on Tuesday, but according to analysts, the currencies of major oil exporters are likely to fall as energy prices continue to fall.
The dollar index traded against a basket of six major currencies near a seven-week low, hit by a drop in US Treasury yields as some investors sought the security of government debt holdings.
Investors are keeping a close eye on a 20-year treasury auction later Wednesday, which will be a key measure of global fixed income demand.
Before the auction results, the yield on the 10-year treasury notes trades at 1.5660%, near a six-week low. Yields on 20-year treasury are 2.1531%, near a seven-week low.
In the sign of growing risk aversion, spot gold traded at $ 1,778.18 per ounce, close to a seven-week high reached on Monday.
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