Asian Stocks Drop On Virus Variant Worries

Virulent variants of the Covid-19 virus emerged as villain again to play spoilsport with the Asian stock markets in the beginning of a new quarter.

China’s Shanghai Composite fell 0.07 percent to close trade at 3588.78 amidst data showing dip in Caixin China General Manufacturing PMI for June to 51.3, a three-month low from 52 in May, primarily due to uptick in Covid-19 cases as well as supply chain disruptions.

Japan’s Nikkei 225 opened at 28832.41 but soon corrected to 28624.80 before finally closing at 28707.04, eroding 0.29 percent from previous day’s closing as the coronavirus delta variant stoked risk aversion in the stock market. Rise in May’s unemployment to 3 percent and the slide in June’s Manufacturing PMI to 52.4 from 53, a month earlier eclipsed the positive sentiment attributed to the big manufacturers’ sentiment jumping to 14 in June quarter, the highest reading since December quarter of 2018.

Sumitomo Heavy Industries rallied 3.92 percent, followed by Hitachi Zosen Corp which gained 2.51 percent. Mitsubishi Electric Corp declined 6.05 percent whereas Kawasaki Kisen Kaisha shed 4.63 percent.

South Korea’s KOSPI moved 14.62 points or 0.44 percent lower to close trade at 3282.06 amidst concerns over increase in the case-loads of the Covid-19 virus. In the meanwhile, South Korea’s trade surplus in the month of June increased to USD 4.44 billion consequent to a 30.7 percent jump in exports and a 40.7 percent surge in imports. Data also showed that IHS Markit Manufacturing PMI rose marginally to 53.9 in June from the level of 53.7 in May.

The Hong Kong Stock Exchange is closed for a local holiday.

Australia’s S&P/ASX200 closed 0.65 percent lower at 7265.60 as a worsening coronavirus situation and consequent lockdowns dampened sentiment.

Gold miners Regis Resources and St Barbara were the leaders in the day’s movement with Regis Resources gaining 8.05 percent and St Barbara adding 5.57 percent. Chalice Mining Ltd shed 5.93 percent whereas Iluka Resources Ltd dropped 4.92 percent.

In the meanwhile, Australia’s trade surplus surged to a record high of AUD 9.68 billion in May as exports jumped 6% compared to a 3% growth in imports.

The IHS Markit Australia Manufacturing PMI decreased to 58.6 in June from 60.4 in May, whereas the Ai Group Australian Performance of Manufacturing Index increased to 63.2 from 61.8 during the same period.

The NZX 50 added 29.03 points or 0.23 percent to close at 12683.63 amidst data that showed ANZ Business Outlook Index rose to -0.6 in June, the highest reading in 4 months as well as a partial reopening of the trans-Tasman bubble.

Enprise group shares surged 10.17 percent following its acquisition of Very Impressive Software. TIL Logistics Group rallied 10 percent upon announcement that its founder shareholders sold down approximately 20.8% of shares to a range of investors. TruScreen group jumped 7.69 percent following announcement of first sale made in Europe. New Talisman Gold Mines that declared annual results on Wednesday dipped by 25 percent.

Overnight the Nasdaq 100 closed at 14554.80, down by 0.12 percent whereas the Dow Jones Industrial Average closed at 34502.51, up by 0.61 percent ahead of the crucial monthly Non-farm Payroll data due on Friday.

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