Asian Shares Mostly Lower On Covid Concerns

Asian stocks ended broadly lower on Tuesday, as outbreaks of the highly contagious Covid-19 variant Delta and reports of new travel curbs in some parts of the world raised concerns about a hindrance to global economic recovery.

Chinese stocks fell sharply as reports of more contagious Delta COVID-19 strain spread in Asia and elsewhere stoked fears of further lockdowns.

The benchmark Shanghai Composite index fell 33.19 points, or 0.92 percent, to 3,573.18 while Hong Kong’s Hang Seng index ended down 274.20 points, or 0.94 percent, at 28,994.10.

Japanese shares fell as pandemic concerns weighed on cyclicals and offset gains in the technology sector. The Nikkei average dropped 235.41 points, or 0.81 percent, to 28,812.61 amid news on another impending State of Emergency in Tokyo and other areas due to signs of resurgence in COVID-19 infections. The broader Topix index settled 0.82 percent lower at 1,949.48.

Department store chain operator Takashimaya slumped 4.7 percent and rival Isetan Mitsukoshi declined 3.2 percent. Steelmaker Nippon Steel tumbled 3.8 percent and JFE Holdings lost 3 percent.

Oil exploration firm Inpex plunged 4.7 percent and Japan Petroleum lost 3.5 percent as oil prices dropped for a second day on worries about slower fuel demand growth.

In economic news, the unemployment rate in Japan came in at 3.0 percent in May – a tad above expectations for 2.9 percent and up from 2.8 percent in April.

Australian markets recouped most losses to end on a flat note as Brisbane became the country’s fourth regional capital city to restrict movement outside of homes except for essential reasons.

Five of Australia’s eight states and territories have been hit by outbreaks of the Delta variant, with around 80 percent of the population under some form of restrictions.

Both the S&P/ASX 200 index and the broader All Ordinaries index finished marginally lower at 7,301.20 and 7,565.50, respectively.

Energy stocks such as Woodside Petroleum, Origin Energy an Oil Search fell 1-2 percent as oil prices hit one-week low on concerns over a spike in COVID-19 cases in Asia and Europe.

Mining heavyweights BHP and Rio Tinto dropped 0.7 percent and 0.8 percent, respectively while banks ended flat to slightly higher.

Technology stocks rose broadly, with Afterpay and Appen rising about 1 percent, taking their cues from a strong session in the tech-heavy Nasdaq Composite index on Wall Street overnight.

Seoul stocks ended lower for the second day running as new COVID-19 outbreaks in Australia and South East Asia weakened investors’ appetite for riskier assets.

The benchmark Kospi slipped 15.21 points, or 0.46 percent, to 3,286.68, taking a cue from new travel bans against the new COVID-19 variants in many parts of the world. Samsung Electronics, SK Hynix and POSCO lost 1-2 percent while LG Chem gained 1.1 percent.

New Zealand shares eked out modest gains, with the benchmark NZX 50 index rising 36.07 points, or 0.29 percent, to 12,639.82. Kathmandu Holdings declined 2.5 percent after the outdoor clothing and equipment retailer issued a profit warning due to lost sales from the Sydney lockdown.

U.S. stocks closed mixed overnight as falling bond yields weighed on the banking sector and Boeing shares fell sharply after reports that the company’s 777X jet would not be certified until 2023.

The tech-heavy Nasdaq Composite rallied 1 percent to settle at a record closing high and the S&P 500 gained 0.2 percent to reach a new closing high amid easing concerns over inflation, while the Dow dropped 0.4 percent.

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