Asian Stock Market: Bears on roll as covid variant sours sentiment, yields drop too

Asian shares see the red amid fears of the coronavirus variant.
Japan weighs border closure for South Africa and five other nations.
WHO and UKHSA calls special meetings to discuss virus strain.
US Commission calls for tighter controls on money flow to China markets.

Anil Panchal FXStreet

Asian equities print the heaviest fall in three months as the covid woes escalate. While portraying the mood, MSCI's index of Asia shares outside Japan drops 1.8%, the most since August whereas Japan’s Nikkei 225 print 2.5% by the press time of early European morning on Friday.

It should be observed that Japan’s Nikkei fail to cheer news that Prime Minister Fumio Kishida pushed for a wage hike policy. The reason could be linked to the chatters, spotted by Jiji news, suggesting border controls for South Africa and five other nations due to the virus resurgence.

Stocks in China and Hong Kong have additional concerns to worry about as the Financial Times (FT) cites the US-China Economic Security Review Commission to signal challenges for funds flowing from Washington to Beijing. The same drowns shares in Australia and New Zealand, by around 2.0% at the latest, whereas markets in Indonesia and South Korea are down nearly 1.5% by the press time.

India’s BSE Sensex drops over 2.0% tracking the broad risk-off mood even as India Finance Secretary T. V. Somanathan said, per Reuters, “Year will end with Capex at or close to budget estimates.”

It’s worth noting that the World Health Organization (WHO) and the UK Health Security Agency (UKHSA) have both called for a special meeting to discuss the new version of the virus and any fears emanating from it to confirm its status as a “variant of concern.” The chatters over the virus version spotted from South Africa, with a formal name of B.1.1.529, grow stronger and weigh on the risk appetite as it is said to be immune to the vaccines.

On a broader front, yields dropped sharply with the 10-year bond coupon declining the most since July and its two-year counterpart marking the heaviest fall since March 2020. Additionally, US stock futures are also down over 1.0% whereas prices of oil slump 3.0% but those of gold gain 0.50% by the press time.

Given the virus fears back to the table, covid updates are the key to follow for fresh impulse.

Read: Yields drop the most in a week, S&P 500 Futures down too amid risk-off mood

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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