Asian markets drop as Delta fans recovery concerns

HONG KONG (AFP): Asian markets fell on Tuesday (Aug 3) while oil held most of the previous day's losses as the impact of the fast-spreading Delta Covid variant on the global recovery fuelled concerns the outlook might not be as rosy as initially hoped.

While corporate earnings continue to impress, trader optimism has taken a knock after a series of below-forecast readings from the world's biggest economies including crucial growth drivers the United States and China.

At the same time, long-running fears that inflation could spike for months to come is fanning talk that central banks will be forced to taper their ultra-loose monetary policies to prevent prices spiralling, taking away a major pillar of the more than year-long rally in equity markets.

"I don't think the market is concerned about Delta as much as it's concerned about how it impacts inflation," Shana Sissel, of Spotlight Asset Group, told Bloomberg Television.

"The longer we have Delta spread globally, the longer the supply chain disruptions will continue."

In a sign that markets are increasingly on edge over the outlook, the yield on 10-year US Treasuries, a key gauge of growth expectations, fell below 1.2 per cent. That came after US growth missed expectations and figures showed growth in factory activity slowing.

Meanwhile, Hong Kong and Shanghai continue to be buffeted by uncertainty caused by China's crackdown on the tech, private tuition and property sectors, which has raised worries that officials will target other industries. The move has also had a limited impact on markets elsewhere, particularly tech firms.

After Monday's rally, Asian traders were given a tepid lead from Wall Street, where all three main indexes finished in negative territory.

Hong Kong led losses, falling one per cent with tech giant Tencent down eight per cent and extending its losing streak to around 20 per cent since China announced its crackdown just over a week ago. News that the city's government was to ease travel restrictions, which could provide a boost to the fragile economy, was met with a shrug.

Tokyo, Shanghai, Singapore, Seoul and Manila were also in the red.

Sydney also fell, though buy-now, pay-later company Afterpay jumped more than 10 per cent -- having soared almost 20 per cent Monday -- after US digital payments platform Square, led by Twitter founder Jack Dorsey, said it would buy it for $29 billion.

Wellington, Taipei and Jakarta edged up.

Oil prices nudged higher but made only a small dent in the losses of more than three per cent suffered Monday as the reimposition of lockdowns and other restrictions in several countries including China raised demand concerns.

"Oil has defied gravity so far this year, but the Delta variant's impact has started to cap its advance," said Oversea-Chinese Banking Corp's Howie Lee.

"It does look as though Asian oil consumption has started to dither and prices will probably consolidate until there is a clearer picture."


Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Next In Aseanplus News

Asean News Headlines at 10pm on Saturday (Sept 18)
Singapore's new Covid-19 cases cross 1,000 mark, highest number since Apr 23 as unvaccinated man, 90, dies from complications
Indonesia president says Covid-19 under control, but urges caution as 3,385 new cases reported on Saturday (Sept 18)
Thailand health ministry says that Covid-19 cases and related deaths in country is now seeing a decline
Philippines: Cases keep rising in Metro Manila as country logs 23,134 new Covid-19 cases, total rises to 2,347,550
Vietnam reports 9,373 new Covid-19 cases; new infections down by more than 2,000 in last 24 hours
Singapore PM: Concrete proposals to tackle women's issues to be presented in early 2022
Thailand: Phuket opens special clinic to deal with Covid-19 cases
Covid-hit Chinese city Xiamen tells residents to stay home as holiday starts
Myanmar earns US$9 billion from border trade in 11 months of this fiscal year

Stories You'll Enjoy