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Investing.com – Asian stocks were down on Thursday morning, with the recent global rally continuing to slow down amid mounting fears over the uptick in COVID-19 cases in China and the U.S.
China reported 21 new cases in Beijing on Wednesday, bringing the total number of cases stemming from the weekend outbreak at the city’s Xinfadi market to over 150. Authorities have escalated measures to curb the spread of the virus, which include closing schools, upping the emergency status to level two, and cancelling flights out of Beijing.
Elsewhere, hospitalizations in Texas jumped to 11% on Wednesday, and Brazil reported a record 34.918 new cases.
“It is a big shock to markets that China, which appears to have successfully quashed the disease, is seeing a second wave. And in the U.S. we see record cases in many states…all this suggests that the more you re-start the economy, the more infections you have. People have thought the economy will quickly recover in July-September after dismal April-June. But that is now becoming uncertain,” Norihiro Fujito, chief investment strategist at Mitsubishi UFJ (NYSE:MUFG) Morgan Stanley (NYSE:MS) Securities, told Reuters.
The global number of cases is fast approaching 8.5 million, alongside almost 450,000 deaths as of June 18, according to Johns Hopkins University data.
Down Under, the ASX 200 slid 1.32% by 10:57 PM ET (2:57 AM GMT) after the Bureau of Statistics released data earlier in the day showing a rise in unemployment to 7.1%, almost a percentage point higher than the 6.4% predicted in April. The rate is Australia’s highest since October 2001.
Hong Kong’s Hang Seng Index fell 1.21%.
China’s Shanghai Composite was down 0.36% while the Shenzhen Component gained 0.28%.
Japan’s Nikkei 225 lost 1.17% and South Korea’s KOSPI was down 0.58%.
Investor enthusiasm for a quick recovery as central banks around the world launched unprecedented stimulus projects, and as encouraging data emerged after lockdowns were loosened, is fast waning.
“The narrative around policy stimulus and better economic data seems to be losing its sway,” Sameer Samana, senior global market strategist at Wells Fargo (NYSE:WFC) Investment Institute, told Bloomberg.
But some investors were optimistic that the Beijing outbreak could be brought under control quicker that the initial outbreak in Wuhan earlier in the year.
Tapas Strickland, director of economics at National Australia Bank (OTC:NABZY), said in a note that Chinese authorities are “taking aggressive action”, with the measures taken toward containing the virus’ spread in Beijing “more targeted” compared to lockdown measures that were imposed in Wuhan.
