Asian shares extend losses on worries about spread of virus

Business

People wearing face masks walk past a bank’s electronic board showing the Hong Kong share index in Hong Kong, Monday, Dec. 21, 2020. Shares have started the week out on a sour note in Asia as worsening coronavirus outbreaks overshadow news that U.S. lawmakers finally have a deal on more support for American families and businesses.(AP Photo/Kin Cheung)

Asian shares retreated on Tuesday, extending losses on growing worries over a new, potentially more infectious strain of the coronavirus.

The outbreaks are raising worries that the world economy may take even worse punishment.

Tokyo’s Nikkei 225 fell 0.5% to 26,595.52. In Hong Kong the Hang Seng edged 0.2% lower to 26,262.02. South Korea’s Kospi declined 0.6% to 2,760.93. In Australia, the S&P/ASX 200 gave up 0.7% to 6,626.70. The Shanghai Composite index shed 0.4% to 3,406.30.

With new uncertainties, “investors appear to be treading more cautiously in Asia this morning, getting more selective and probably waiting for the new mutant virus to be better understood before aggressively diving back into the Airlines, Travel & Leisure vaccinated bandwagon,” Stephen Innes of Axi said in a commentary.

Stocks, oil prices and Treasury yields fell on Monday, a sign investors are uneasy about the economy.

News of the new and potentially more infectious strain of the coronavirus has countries around the world restricting travel from the United Kingdom. That has traders worried about the possible economic consequences should it spread to other countries or prove resistant to vaccines being distributed now.

U.K. Prime Minister Boris Johnson put London and the southeast of England in a new level of restrictions after scientific advisers warned they had detected the new variant of the coronavirus. There is no evidence that the new strain’s mutations make it more deadly, but it seems to infect more easily than others.

The S&P 500 fell 1.4% to 3,694.92. The Dow Jones Industrial Average rose 0.1% to 30,216.45. The Nasdaq composite slipped 0.1% to 12,742.52. The Russell 2000 small-cap index gained 0.1% to 1,970.33.

Encouraging news out of Washington helped keep the selling in check. Congressfinally approved a $900 billion relief effort for the economy that includes $600 in cash payments for most Americans, extra benefits for laid-off workers and other financial support.

Economists and investors have been clamoring for such aid for months, and a recent upswing in momentum for talks had stock prices rising in anticipation of a deal. Analysts said some traders may have been selling to lock in profits, with the compromise all but assured and prices close to the highest they’ve ever been. Even after Monday’s drop, the S&P 500 is back only to where it was earlier this month.

Across the Atlantic, negotiators blew past a Sunday deadline set for talks on trade terms for the United Kingdom’s exit from the European Union. Investors have been fixed on the progress of those talks because a Brexit with no deal could cause massive disruptions for businesses on New Year’s Day.

Monday was also the first day of trading for Tesla since joining the S&P 500 index. The electric-vehicle maker surged so much this year, nearly 731% as of Friday evening, that some critics say its price doesn’t make sense. But its inclusion in the benchmark index triggered $90.3 billion in trades, as the company instantly became the sixth-biggest in the S&P 500. Tesla slumped 6.5% Monday.

The yield on the 10-year Treasury held steady at 0.93%.

Benchmark U.S. crude oil lost 27 cents to $47.70 per barrel in electronic trading on the New York Mercantile Exchange. It gave up $1.27 on Monday to $47.97 per barrel.

Brent crude, the international standard, slipped 23 cents to $50.68 per barrel.

The dollar rose to 103.41 Japanese yen from 103.31 yen on Monday. The euro fell to $1.2232 from $1.2243.

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AP Business Writers Stan Choe and Alex Veiga contributed.

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