Stocks

Asian stocks edge lower as corporate earnings loom

Reuters NEW YORK | Updated on July 08, 2020 Published on July 08, 2020

Markets largely in “wait and see mode” ahead of the upcoming earnings session

Asian stocks were set for a mixed open on Wednesday, as an increase in new coronavirus cases in some parts of the world cast doubts over the economic recovery, leading some investors to cash in on recent gains ahead of earnings season.

The Japan’s Nikkei 225 index edged lower by 32.59 points, or 0.13%, to 22,583.61, while the Australian S&P/ASX 200 lost 0.57% in early trading and Hong Kong's Hang Seng index was down 16.50 points to 25,954.50.

U.S. stocks fell on Tuesday, halting a five-day winning streak by the benchmark S&P 500 index, its longest this year, which had been driven by better-than-expected economic data.

Following the recent rally, the declines looked like a consolidation, with the markets largely in “wait and see mode” ahead of the upcoming earnings session, said NAB economist Tapas Strickland.

“It will be important to watch the number of U.S. deaths in coming weeks and whether greater questions will be asked about the extent of necessary restrictions,” he added.

The United States reported tens of thousands of new coronavirus infections, prompting New York to expand its travel quarantine for visitors from three more states, while Florida's greater Miami area rolled back its reopening.

The surge has made business owners “nervous again,” Atlanta Federal Reserve Bank President Raphael Bostic said on Tuesday. ”There is a real sense this might go on longer than we have planned for,” he said.

Coronavirus cases were also on the rise in the Australian state of Victoria, which led to lockdown measures being reimposed in Melbourne, the country's second-biggest city.

“The second wave of infection will see Victorian economic activity fall sharply and it will continue to lag the rest of Australia,” said NAB economist Kaixin Owyong.

Victoria makes up around a quarter of Australian economic activity, she said.

MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.78% lower.

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The benchmark 10-year yield was down at 0.6397%, from 0.648% late on Monday.

Spot gold jumped 0.7% to $1,796.08 per ounce.

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Published on July 08, 2020
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