SINGAPORE — Shares in Asia-Pacific fell in morning trade on Thursday following an overnight plunge on Wall Street as coronavirus cases continue to surge in the West.
The sustained increase in coronavirus cases seen in the U.S. as well as across Europe likely weighed on investor sentiment in Asia-Pacific on Thursday.
Shares in South Korea were among the biggest losers regionally, as the Kospi fell 1.69%. Shares of industry heavyweight Samsung Electronics declined around 2% after the firm on Thursday predicted a fourth-quarter decline in profits.
Meanwhile, stocks in Australia also saw sizable losses as the S&P/ASX 200 dropped 1.74%
In Hong Kong, the Hang Seng index fell 0.93%. Mainland Chinese stocks bucked the overall trend regionally as they rose by the afternoon, with the Shanghai composite fractionally higher while the Shenzhen component rose 0.831%.
Over in Japan, the Nikkei 225 declined 0.36% while the Topix index shed 0.15%. Shares of Sony, however, surged about 6% after the firm raised its annual profit outlook.
MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.83%.
Meanwhile, as risk sentiment continued to weigh on investors, the dollar was still at elevated levels as compared to earlier this week, while spot gold continued to be lower.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 93.413 following levels above 92 earlier this week. The dollar is often seen as a safe-haven asset in times of uncertainty.
Spot gold was at $1,881.13 per ounce, following its decline from the $1,900 level earlier this week.
The Japanese yen traded at 104.44 per dollar, having strengthened from levels above 104.8 against the greenback earlier this week.
Bank of Japan keeps monetary policy steady
The Bank of Japan kept monetary policy steady on Thursday, in a widely expected decision. In the central bank’s quarterly report, its median forecast for real GDP was revised downward to a 5.5% decline in fiscal year 2020. That compared against a median expectation of a 4.7% fall projected in the previous report in July.
Japan’s retail sales fell 8.7% in September as compared to a year earlier, according to the Ministry of Economy, Trade and Industry’s Preliminary Report on the Current Survey of Commerce released Thursday. That compared against a median market forecast for a 7.7% decline, according to Reuters.
Covid-19 spread in the West
Markets stateside had a sharp selloff overnight. The Dow Jones Industrial Average dropped 943.24 points, or 3.4%, to close at 26,519.95 — its fourth straight negative session. The S&P 500 slipped 3.5% to end its trading day at 3,271.03 while the Nasdaq Composite fell 3.7% to close at 11,004.87.
Tuesday was the third consecutive day the U.S. set a record high of average daily Covid-19 cases. In Europe, Germany and France announced tough new restrictions on businesses Wednesday in a bid to stem the spread of the coronavirus as the countries deal with worsening outbreaks.
“The inability to control the “second wave” outbreak resulting in re-imposition of tighter social restrictions in Europe (led by Germany and France) is leading to grave concerns that the US and UK, with its similar pattern of resurgence, will have to follow suit,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, wrote in a note.
Oil prices edge higher
Oil prices were higher in the afternoon of Asian trading hours, with international benchmark Brent crude futures above the flatline as it traded at $39.13 per barrel. U.S. crude futures added 0.19% to $37.46 per barrel.
The Australian dollar changed hands at $0.7067 after yesterday’s sharp drop from above $0.712.
Source: CNBC