By Andrew Galbraith and Lawrence Delevingne
SHANGHAI/BOSTON, Nov 13 (Reuters) - Stocks in Asia fell on
Friday, following on from selloffs in the United States and
Europe as investors feared the economic impact of an
accelerating rise in coronavirus infections.
The United States has reported fresh daily records for new
COVID-19 case hospitalisations this week, prompting cities and
states, including Chicago, Detroit and California, to re-impose
public health restrictions. European officials have also warned against complacency and
said measures to control infections must continue despite hopes
that vaccines under development could help to slow the spread of
the novel coronavirus. U.S. Federal Reserve Chair Jerome Powell said on Thursday
during a discussion with other central bankers that progress in
developing a coronavirus vaccine was welcome news but that
near-term economic risks remain as infections accelerate,
underscoring the likely need for additional government stimulus.
Against that grim backdrop, MSCI's broadest index of Asian
shares outside Japan .MIAPJ0000PUS dipped 0.25% in early trade
as shares across the region stumbled.
Chinese blue-chips .CSI300 led losses, falling 1.21%.
Australian shares .AXJO lost 0.47%, Seoul's Kospi .KS11 was
down 0.16% and the Hang Seng .HSI was 0.55% lower.
Japan's Nikkei 225 .N225 fell 0.95%.
Some investors saw a buying opportunity in the slump.
"My view is this is the dark just before dawn," said Michael
Frazis, portfolio manager at Frazis Capital Partners in Sydney.
"You've got the second wave of coronavirus, new sets of
shutdowns, clear problems around the world, travel dropping off
again... But at the same time, we have the strongest possible
evidence that we do have a vaccine and many people will be
vaccinated over the next few months."
"We think this is all actually very positive and it's
actually a good time to be investing in markets," he said.
Frazis said many risks nevertheless remained for short-term
traders amid ongoing uncertainty over issues like the U.S.
stimulus response.
On Thursday, top Democrats in the U.S. Congress urged
renewed negotiations over a multitrillion-dollar coronavirus aid
proposal, but the top Republican immediately rejected their
approach as too expensive, continuing a months-long impasse.
Wall Street dropped on Thursday in a broad sell-off.
The Dow Jones Industrial Average .DJI fell 1.08%, pulled
lower by industrial and financial companies sensitive to
economic growth. The S&P 500 .SPX lost 1.00% and the
technology-heavy Nasdaq Composite .IXIC dropped 0.65%.
U.S. Treasury yields also sank on Thursday, weighed down by
the persistent rise in coronavirus cases and data showing
inflation remained benign in the world's largest economy. The
U.S. yield curve, viewed in part as a gauge of risk appetite,
also flattened. On Friday, U.S. yields continued to tick lower, with
benchmark 10-year Treasury notes US10YT=RR yielding 0.8766%,
compared to a Thursday close of 0.886%.
"Bond yields, which had been flirting with the 1.0% level in
terms of the U.S. 10Y Treasury, have ... snapped back sharply in
terms of yield," Rob Carnell, Asia Pacific head of research at
ING said in a note.
"That move most likely got a further nudge from the
softer-than-expected U.S. inflation data for October which were
released yesterday, and which tally with a weaker economic
reality."
Rising risk aversion lifted the safe-haven yen, with the
dollar dropping 0.18% against the Japanese currency to 104.93
JPY= . The euro EUR= was flat in Asian morning trade and the
dollar index =USD ticked 0.2% higher to 92.987.
An unexpected rise in U.S. crude stockpiles exacerbated
virus-linked economic fears in commodity markets, pushing U.S.
crude CLc1 1.63% lower to $40.45 per barrel. Global benchmark Brent crude LCOc1 dropped 1.45% to $42.90
per barrel.
Spot gold XAU= gained 0.17% to $1,878.97 per ounce. GOL/
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