Asian shares follow Wall Street lower, virus concerns weigh heavy – Aljazeera.com

Asian shares fell on Wednesday and oil prices hit lows not seen since June after a rout in technology shares sank Wall Street for a third consecutive day and a major drugmaker paused testing of a coronavirus vaccine.

MSCI’s broadest index of Asia-Pacific shares outside Japan slid 1.06 percent. Australian stocks dropped 2.47 percent, while shares in China fell 1.53 percent. Japan’s Nikkei skidded 1.12 percent.

The US-based S&P 500 E-mini stock futures erased losses and rose 0.25 percent, while Nasdaq futures also rose 0.83 percent.

Euro Stoxx 50 futures were down 0.03 percent, German DAX futures fell 0.14 percent, and London’s FTSE futures fell 0.29 percent.

Sentiment for equities and other risky assets also took a hit after AstraZeneca Plc paused a late-stage trial of one of the leading coronavirus vaccine candidates due to an unexplained illness in a study participant.

US Treasury bond yields extended declines as investors sought the safety of holding government debt. Risk aversion also pushed the yen to a one-week high against the dollar.

A sell-off in high-flying US technology shares has increased the risk of a larger correction across other markets.

“The performance of Wall Street is going to leave a heavy residue, and most noteworthy is how the tech names dropped down quite aggressively. Investors will take a close note of that,” said Tom Piotrowski, a markets analyst at Australian broker CommSec.

“The dramatic fall in oil prices in the last day is being seen as a proxy for global growth expectations. That 7.6 percent fall will certainly be resonating.”

The Dow Jones Industrial Average fell 2.25 percent, the S&P 500 lost 2.78 percent, and the Nasdaq Composite dropped 4.11 percent on Wall Street on Wednesday.

Among US technology firms, electric-car maker Tesla plunged 21.06 percent on Tuesday, its biggest daily percentage drop, after it was excluded from a group of companies being added to the S&P 500.

SoftBank Group Corp shares fell 3.64 percent on Wednesday due to worries about the Japanese conglomerate’s exposure to US technology stocks.

SoftBank has fallen about 12 percent since sources told Reuters and other media late last week that it built up stakes in major US tech companies – which have surged in recent months – worth approximately $4bn.

Turbulence ahead

Investors say they are expecting wide swings in share prices over the coming weeks.

The US Federal Reserve’s next meeting ends on September 16, which could have a big impact on stock markets because many analysts say excess liquidity created by the Fed has contributed to rising equity prices this year.

The British pound fell to six-week lows against both the dollar and the euro.

Escalating concerns over Britain leaving the European Union without a trade agreement are weighing on the sterling.

The dollar index against a basket of six major currencies stood near a four-week high as Wall Street’s sell-off and renewed fears about Brexit boosted safe-harbour demand for the greenback.

Oil futures extended their sharp decline to the lowest levels since June due to concern about weak global energy demand and excess supply.

Brent crude fell 0.63 percent to $39.53 a barrel, while US crude lost 0.73 percent to trade at $36.49.

SOURCE:
Reuters news agency