As virus fears persist, Asian markets are mixed following the Wall Street rally.
Despite a robust bounce in New York, equity markets failed to retain early gains Wednesday, and subsequent trade was uneven, with optimism about the global economy and worry about the fast-spreading Delta variant fueling volatility.
Surges in infections around the world have forced new lockdowns and containment measures, putting the global recovery at risk. Investor confidence has been shaken in recent weeks by surging infections around the world, which have forced new lockdowns and containment measures while putting the global recovery at risk.
As dealers migrated into safe havens like Treasuries, gold, and the yen, equity markets, which had been trading at record or all-time highs, suffered significant losses.
The highly transmissible Delta strain, which has spread like wildfire across countries, including those with high vaccination rates, has been heavily blamed. The biggest concern is for those who are unable to inoculate their populations in a timely manner.
The World Health Organization’s director-general warned on Wednesday that the pandemic was “a test the world is failing.”
Analysts, on the other hand, indicated that while the short-term view was grim, they were optimistic about the long-term outlook and that market losses were to be expected.
“We had a drop, we had a shock, there is fear of the Delta variant, and there is the other side – which is that someday we will get through Covid, and when we do, we will have a global recovery,” Cumberland Advisors’ David Kotok told Bloomberg Television.
“We’ve been witnessing that tension in the markets for a few days now.”
On Wall Street, all three major indices ended the day with gains of more than 1%, while Asia struggled to keep up.
Tokyo, Shanghai, Sydney, Wellington, and Jakarta all increased in value, while Hong Kong, Seoul, Taipei, Manila, and Bangkok declined, with Singapore scarcely moving.
At the open, London, Paris, and Frankfurt all climbed, extending their one-percentage-point gains from Tuesday.
Fears of rising infection rates fueled a drop in oil prices, while data from the American Petroleum Institute indicating a surprising increase in US stocks last week contributed to the market’s woes.
This is in addition to news this week that OPEC and other major producers had finally decided to increase output in response to concerns that a supply crisis could arise as a result of the economic recovery and people returning to their everyday routines.
“Oil prices could be vulnerable to further losses if official US crude stocks rise (Wednesday) instead of falling by an anticipated 4.5 million barrels,” cautioned. Brief News from Washington Newsday.