Asian stocks slide as new COVID cases rise

SHANGHAI, July 21 (Reuters) – Asian stocks stumbled on Wednesday, relinquishing their early gains, as the dollar was firm as investors feared a rapidly spreading coronavirus variant could hamper the global economic recovery.

But European stock markets were set for a slightly higher open after steep falls earlier this week, ahead of a European Central Bank meeting on Thursday that is expected to convey a conciliatory tone. Read more

Euro Stoxx 50 futures rose 0.16% and German DAX futures rose 0.07%. Futures on FTSE added 0.08%.

The Delta coronavirus variant has so far displaced inflation as the main concern for investors, with South Korea reporting a daily record for new infections on Wednesday. Read more

Last week, data showing a surge in consumer prices in the United States in June raised concerns that the Federal Reserve could end emergency stimulus sooner. Read more

Shifting from a debate over whether price spikes are transient to outright fear of the impact of the latest wave of COVID-19 has caused the US 10-year yield to drop by more than 20 points base within a week as investors shifted to security. own assets. The S&P 500 (.SPX) fell almost 4% between last Wednesday’s highs and Monday’s lows before rebounding.

On Wednesday, the MSCI’s largest Asia-Pacific stock index outside of Japan (.MIAPJ0000PUS) reversed its initial gains to retreat 0.14%, taking the week’s losses to more than 2%.

Seoul’s KOSPI (.KS11) slipped 0.29% and the Hong Kong Hang Seng Index (.HSI) fell 0.46%.

The Japanese Nikkei (.N225) was up 0.6% after hitting a six-month low a day earlier, as investors bought cyclical stocks ahead of a long weekend that will mark the start of the Olympics Tokyo 2020 and that a jump in exports in June boosted hopes for an export-led economic recovery. Read more

Blue-chip Chinese stocks (.CSI300) were also higher, up 0.81%

“The volume level, the sporadic level of jigsaw price action, I think, tells you that there isn’t a lot of conviction one way or another,” Kay Van said. -Petersen, Global Macro Strategist at Saxo Capital Markets in Singapore.

But while he said the peak in global growth has likely passed, accommodative central bank policies continue to strongly support global asset prices, even as they begin to signal declining asset purchases.

“The balance sheets of the G4 central banks have grown 15% since 2008. And what I’m saying is it’s not going to stop. It’s not going to stop.”

US Treasuries prices edged down, with the 10-year yield hitting 1.2151% from the previous day’s close of 1.209%. The 2-year yield was 0.2037%, compared to a close of 0.194%.

But echoing stock market concerns over a rise in global COVID-19 infections, the dollar remained near its three-month highs on Wednesday.

“While part of the world ignores the increase in infections as vaccination rates limit the severity of any symptom of new cases, there are few parts of the world that can totally ignore it,” said Rob Carnell , Asia-Pacific Chief Economist at ING.

The dollar index was last up 0.08% to 93.041, with the euro down 0.07% to $ 1.1771. The dollar strengthened 0.05% against the yen to 109.89.

Oil prices resumed their decline after rebounding on Tuesday, as an industry report showed an unexpected build-up in oil stocks in the United States.

U.S. West Texas Intermediate crude fell 0.46% to $ 66.89 per barrel and Brent traded at $ 69.06 per barrel, down 0.42% on the day.

Spot gold fell 0.07% to $ 1,808.84 an ounce as US yields rebounded.

Reporting by Andrew Galbraith; Editing by Christopher Cushing and Kim Coghill

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