Global stocks fell after a jump in new coronavirus infections in the US and China stoked investor concerns over a potential second wave of the pandemic.
In Asia-Pacific on Monday, Japan’s benchmark Topix index dropped 0.7 per cent while Hong Kong’s Hang Seng index and China’s CSI 300 shares slipped by 0.6 per cent and 0.1 per cent respectively. Australia’s S&P/ASX 200 fell 1.2 per cent and South Korea’s Kospi shed 1.3 per cent.
Futures markets tipped the S&P 500 to drop 1.7 per cent when Wall Street begins trading later in the day. The FTSE 100 was expected to fall 0.7 per cent.
Those losses came after almost 80 new coronavirus infections were recorded in Beijing over the weekend, many linked to a fresh seafood and vegetable wholesale market. Until the latest outbreak, the city had gone more than 50 days without a new case and the development has prompted concerns over a second wave of infections in the Chinese capital.
That has raised the prospect of new lockdowns in China, which could derail the country’s economic recovery. China’s National Bureau of Statistics said on Monday that industrial production in May grew by 4.4 per cent year on year, higher than the month before but still below some analysts’ expectations.
Equity markets — which have staged a powerful rally in recent weeks — have also been unsettled by a jump in US coronavirus cases. Covid-19 infections increased by more than 25,000 over the weekend with states including Texas and Florida reporting record rises after reopening their economies.
More than 2m people have tested positive for Covid-19 in the US, the most of any country. More than 100,000 have died of the virus.
“At a global level, this talk of second waves is misplaced, as daily new cases have been rising steadily since early May,” said Robert Carnell, head of research for Asia-Pacific at ING. “Also, if globally, we are still in wave one, then it is possible that without a vaccine, the big wave is still lying out there somewhere waiting to hit.”
The yield on the US 10-year Treasury, viewed by investors as a haven during times of uncertainty, fell 0.05 percentage points to 0.658 per cent.
Oil prices also fell with Brent crude, the international benchmark, down 2.2 per cent to $37.87 a barrel. US marker West Texas Intermediate was down 3.3 per cent at $35.08.
Additional reporting by Don Weinland in Beijing