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Asia-Pacific Shares Weaken After WHO Reports Record Rise in COVID-19 Cases

James Hyerczyk
·3 min read

The major Asia-Pacific stock indexes finished mixed, but mostly lower on Thursday with South Korea coming out the lone winner for the session. The trade was a little tentative as investors continued to digest the data from the reopening of global economies amid the coronavirus pandemic.

The World Health Organization said the number of newly reported cases globally hit a daily record this week, amid authorities around the world attempting to ease lockdown measures put in place to curb the virus’ spread.

On Thursday, Japan’s Nikkei 225 Index settled at 20552.31, down 42.84 or -0.21. Hong Kong’s Hang Seng Index finished at 24280.03, down 119.92 or -0.49% and South Korea’s KOSPI Index closed at 1998.31, up 8.67 or +0.44%.

China’s Shanghai Index settled at 2867.92, down 15.81 or -0.55% and Australia’s S&P/ASX 200 Index closed at 5550.40, down 22.60 or -0.41%.

Absent from the trade on Thursday was the euphoria fueled on Monday after Moderna announced a positive development for a potential coronavirus vaccine. This is because on Wednesday, a STAT News report said vaccine experts were skeptical of Moderna’s new vaccine data. In response to the report, Moderna’s CEO said the company would never put out data that was different from “reality.”

Australian Stock Market

Australia made the deepest dividend cuts globally this year, with more than $6 billion deferred or cancelled as companies conserve cash to ride out the coronavirus, turning foreign investors wary of the country’s normally high-yielding firms, according to Reuters.

Payout changes have been announced over the past two months and strategists believe more are coming as companies sign off annual accounts on June 30.

Financials comprise more than a quarter of the benchmark stock price index and, under pressure to demonstrate stability to regulators, account for the steepest cuts.

Hong Kong Stock Market

Hong Kong stocks slipped on Thursday, dragged down by technology shares, after U.S. officials said regulators were open to making changes to close a possible loophole in a new rule aimed at curbing global chip sales to Chinese firm Huawei Technologies.

A U.S. State Department official said the rule, which currently includes chips designed by Huawei and doesn’t cover shipments if they are sent directly to the company’s customers – will be watched by regulators and “certainly make any changes that we think are necessary.”

Investors also awaited China’s parliamentary meeting, where Premier Li Keqiang is expected to make a state-of-the-nation style address and reiterate Beijing’s long-standing vow to keep the Yuan stable.

Japan Stock Market

Japan’s Nikkei share average snapped a four-day winning streak on Thursday, as investors were reluctant to chase markets after the benchmark hit a 2-1/2-month high, raising concerns that stocks were potentially overvalued.

Although the market has rallied on hopes of a quick economic recovery following countries’ move to ease coronavirus restrictions, investors have noted the market’s valuations are getting stretched, according to Reuters.

The Japanese government is expected to lift its state of emergency later in the day in three prefectures around Osaka, the country’s second-biggest urban area after Tokyo, and might take similar steps for Tokyo by the end of the month.

This article was originally posted on FX Empire