Asia report: Markets fall as investors watch worsening Covid situation

Markets in Asia finished mostly weaker on Monday, as investors watched a worsening Covid-19 situation in western economies, with the US in particular topping records in terms of new cases.

In Japan, the Nikkei 225 was down 0.1% at 23,494.34, as the yen weakened 0.12% against the dollar to last trade atJPY 104.84.

Technology conglomerate SoftBank Group was down 2.74%, while among the benchmark’s other major components, automation specialist Fanuc was up 0.19%, and fashion firm Fast Retailing rose 1.36%.

The broader Topix index was off 0.39% by the end of trading in Tokyo, closing at 1,618.98.

On the mainland, the Shanghai Composite was 0.82% weaker at 3,251.12, while the smaller, technology-heavy Shenzhen Composite was 0.52% firmer at 2,212.07.

South Korea’s Kospi lost 0.72% by the close, settling at 2,343.91, with shares in members of the Samsung chaebol mixed after news that Samsung Electronics chairman Lee Kun-hee had died.

Samsung C&T rocketed ahead 13.46%, Samsung Electronics eked out gains of 0.33%, and Samsung Life Insurance was 3.8% firmer.

Shares in Samsung Heavy Industries dropped 0.96%, however, and those in Samsung SDI were off 1.65%.

Chipmaker SK Hynix was in negative territory by the close, falling 0.83%.

Investors kept a close eye on coronavirus developments in the west during the Asian session, as the US reported a record-breaking number of new cases on Friday, at 83,757.

Europe was also being monitored, as Italy closed public gyms and ordered a curfew on bars, and France recorded a daily record number of infections as well.

“Global growth barometers are getting hammered in Asia with crude oil tanking over 2% and hugely underperforming in the context of a 0.6% fall in S&P 500 futures,” said Axi chief global market strategist Stephen Innes.

“European governments, including Italy and Spain, announced tighter social mobility restrictions over the weekend after a sharp rise in recorded coronavirus cases.

“However, announcements in both countries fell short of national lockdowns.

Innes said that at this stage of the oil demand recovery cycle, waning global demand due to Covid-19’s second and third wave mobility restrictions and more barrels coming to market due to Libya lifting the force majeure was “unequivocally the most toxic elixir” for oil markets to start a new week.

“Fortunately, there are several vaccines in the pipeline, or we could have been looking at a pretty significant market reset this morning with Covid-19 flash points flaring up in virtually every corner of the globe this weekend.”

Markets in Hong Kong were closed for a public holiday, as were those in New Zealand.

Oil prices were lower at the end of the Asian day, with Brent crude last down 0.94% at $40.96 per barrel, and West Texas Intermediate off 2.16% at $38.99.

In Australia, the S&P/ASX 200 was off 0.18% at 6,155.60.

The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.03% at AUD 1.4007, and the Kiwi advancing 0.05% to NZD 1.4938.