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Asian Shares Slide As Recovery Hopes Fade

stockmarkets jan17 10jul20 lt

Asian stocks declined on Friday as a surge in coronavirus cases stoked fears that new lockdowns could take a toll on the economic recovery. Investors also turned cautious ahead of the corporate earnings season beginning next week.

Chinese shares fell as state media discouraged retail investors from chasing the market higher and U.S.-China tensions reemerged. The U.S. on Thursday imposed sanctions on the highest-ranking Chinese official yet targeted over alleged human rights abuses against the Uighur Muslim minority.

The benchmark Shanghai Composite index fell 67.27 points, or 1.95 percent, to 3,383.32, snapping an eight-day winning streak. Hong Kong's Hang Seng index lost 1.84 percent to finish at 25,727.41.

Japanese shares hit a one-week low as the safe-haven yen strengthened and the Tokyo Metropolitan Government reported an all-time high of 243 new coronavirus cases in the city, fueling concerns that the path to economic recovery could be hindered.

Meanwhile, the Bank of Japan downgraded economic assessment of all nine regions for the second straight time, citing the impact of the novel coronavirus.

According to the latest quarterly Regional Economic Report, all nine regions reported that the economic situation is worsening.

The Nikkei average fell 238.48 points, or 1.06 percent, to 22,290.81, its lowest close since July 2. The broader Topix index ended down 1.42 percent at 1,535.20, also marking its lowest close since June 15.

Uniqlo owner Fast Retailing slumped 3.3 percent after lowering its outlook for the year. Ryohin Keikaku plummeted 5.4 percent after its U.S. subsidiary filed for Chapter 11 bankruptcy protection due to coronavirus.

Retail group Aeon Co. shed 1 percent after reporting a net loss for the first quarter. Sony Corp rose 1.4 percent on reports that it has acquired a minority stake in Epic Games - the creator of Fortnite and Unreal Engine.

Australian markets ended lower as authorities grappled with rising coronavirus cases in Victoria, which recorded 288 new Covid-19 cases overnight, the largest single day in Australia since the pandemic began.

The benchmark S&P/ASX 200 index dropped 36.30 points, or 0.61 percent, to 5,919.20, while the broader All Ordinaries index ended down 38.60 points, or 0.64 percent, at 6,036.30.

Gold miners snapped three straight sessions of gains after gold prices retreated. Evolution Mining tumbled 3 percent, Newcrest gave up 1.4 percent and Northern Star Resources lost about 1 percent. Bellevue Gold slumped 4 percent after announcing a discounted share placement.

Energy companies Woodside Petroleum, Origin energy, Santos and Oil Search plunged 2-4 percent as oil extended losses from the previous session on worries that renewed lockdowns to contain the spread of coronavirus in the United States will restrict fuel demand recovery in the nation.

Seoul stocks fell notably as rising new coronavirus cases around the world made investors risk averse. The benchmark Kospi ended down 17.65 points, or 0.81 percent, at 2,150.25 after daily Covid-19 cases in the United States topped 60,000 for the first time Thursday.

Closer home, South Korea added 45 new Covid-19 infections today, marking a steady decline since Sunday when South Korea confirmed more than 60 cases for the third consecutive day.

Steelmaker POSCO declined 3.5 percent and Hyundai Motor gave up 1.3 percent, while internet giant Naver jumped 4 percent.

New Zealand shares gave up early gains to end modestly lower. The benchmark NZX-50 dropped 46.02 points, or 0.4 percent, to 11,394.86, with tech and telecommunication stocks pacing the declines. Telecom services provider Chorus plunged 8.3 percent after reporting a decline in its fourth-quarter total fixed line connections.

The total value of electronic retail credit card spending in New Zealand climbed a seasonally adjusted 16.3 percent month on month in June, Statistics New Zealand said - coming in at NZ$5.7 billion. That follows the 78.9 percent surge in May. On a yearly basis, retail card spending climbed 8.0 percent after sinking 6.0 percent in the previous month.

U.S. stocks ended mixed overnight as data showed that initial unemployment claims remain elevated and the relentless surge in coronavirus cases across America raised fears of another lockdown in several states.

The Dow Jones Industrial Average fell 1.4 percent and the S&P 500 shed 0.6 percent, while the tech-heavy Nasdaq Composite index rose half a percent to reach a record closing high.

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