Asia report: Most markets fall on Covid spread, economic gloom

Most markets in Asia finished weaker on Thursday, as investors digested a fresh economic warning from the Asian Development Bank, and watched a concerning rise in the number of Covid-19 cases in the United States.

In Japan, the Nikkei 225 was down 0.45% at 22,355.46, as the yen weakened 0.03% against the dollar to last trade at JPY 107.04.

Technology conglomerate SoftBank Group rose 2.85%, while among the benchmark’s other major components, automation specialist Fanuc was down 2.09% and fashion firm Fast Retailing lost 1.73%.

The broader Topix index was also weaker by the close in Tokyo, finishing 0.25% lower at 1,583.09.

On the mainland, the Shanghai Composite managed gains of 0.12% to 2,939.32, and the smaller, technology-heavy Shenzhen Composite was 0.24% firmer at 1,908.33.

South Korea’s Kospi was off 0.35% at 2,133.48, while the Hang Seng Index in Hong Kong slipped 0.07% to 24,464.94.

Chinese e-commerce behemoth JD.com was a star performer in the special administrative region, leaping 3.54% in its debut session in Hong Kong.

The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics rising 0.19%, while chipmaker SK Hynix fell 0.69%.

Increasing numbers of Covid-19 cases were being watched during the Asian session, with the number of hospitalisations in Texas rocketing 11% on Wednesday alone.

The latest projection from the Institute for Health Metrics and Evaluation calculates more than 201,000 Americans losing their lives to the coronavirus by October.

In China, meanwhile, parts of Beijing remain in a fresh lockdown, with schools closed and flights and trains cancelled after a recent resurgence of Covid-19, linked to a fresh food market.

“Sentiment in stock markets in East Asia is fragile as the partial lockdown in Beijing has become more restrictive - dozens of flights have been cancelled, for example,” said CMC Markets UK market analyst David Madden.

“US index futures are lower on the back of rising infection numbers in states like Texas and Arizona,” he added.

On the broader economic front, the Asian Development Bank (ADB) said on Thursday that developing markets in the region will “barely grow” this year.

“Economies in Asia and the Pacific will continue to feel the blow of the Covid-19 pandemic this year even as lockdowns are slowly eased and select economic activities restart in a ‘new normal’ scenario,” said ADB chief economist Yasuyuki Sawada.

“While we see a higher growth outlook for the region in 2021, this is mainly due to weak numbers this year, and this will not be a v-shaped recovery.

“Governments should undertake policy measures to reduce the negative impact of Covid-19 and ensure that no further waves of outbreaks occur.”

Oil prices were higher at the end of the Asian day, with Brent crude last up 0.81% at $41.04 per barrel, and West Texas Intermediate ahead 0.55% at $38.17.

In Australia, the S&P/ASX 200 was off 0.92% at 5,936.50, as investors in the sunburnt country pored through the latest jobless figures.

The country’s official unemployment rate rose to 7.1% in May, from a revised 6.4% reading for April, making for the highest month of unemployment since 2001.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 fell 0.96% to close at 11,225.28, led lower by Tourism Holdings, which was off 6.5%.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.14% at AUD 1.4547, and the Kiwi retreating 0.19% to NZD 1.5515.