(Bloomberg) — Asian stocks slumped on Friday after a rout on Wall Street triggered by concerns the epic rally since March was excessive given the emergence of a second wave of infections in some locations.
Japanese and Australian shares sank over 2% and Korean stocks were down about 3%. Hong Kong and Shanghai opened lower. U.S. futures suggested some stabilization, rising after the S&P 500 sank almost 6% Thursday, the most in 12 weeks, with only one company in the index finishing higher. Airlines, cruise and travel shares that soared in recent weeks bore the brunt of the selling. The KBW Bank Index of financial heavyweights slid 9%, and energy producers joined a rout in oil. Treasuries and the dollar held gains, and crude oil slid.
While much of the equity selling owed to the frantic pace of the recent rally, sentiment did sour as signs mounted of a possible second wave of the pandemic. Houston, the fourth-largest American city, is girding for a resurgence. Still, Treasury Secretary Steven Mnuchin said the U.S. shouldn’t shut down the economy again even if there is another jump in coronavirus cases.
“Certainly there are going to be some second-wave concerns so it is right for the market to be worried about that,” Lori Heinel, deputy global chief investment officer, said on Bloomberg TV at State Street Global Advisors. “We also had seen an incredible rally from the bottom so the idea that investors might be looking to take some profits here is certainly what’s driving the sell-off as well.”
As restrictions lift across the U.S., more than 2 million people have now been infected. The localized surges have raised concerns among experts even as the nation’s overall case count early this week rose just under 1%, the smallest increase since March.
Elsewhere, crude oil tumbled almost 9% amid Thursday’s large moves in global markets. European shares slumped.
These are some of the main moves in markets:
Futures on the S&P 500 rose 0.7% as of 10:29 a.m. in Tokyo. The index sank 5.9% Thursday.Japan’s Topix Index dropped 2.4%.Australia’s S&P/ASX 200 Index retreated 2.8%.Kospi Index fell 2.9%.Hang Seng fell 2.3%.Shanghai Composite fell 1.6%.
The Bloomberg Dollar Spot Index rose 0.2% after surging 1.2% Thursday.The yen was little changed at 106.75 per dollar.The offshore yuan was flat at 7.0811 per dollar.The euro bought $1.1283.
The yield on 10-year Treasuries was at 0.67% after sliding six basis points Thursday.Australian 10-year yields fell about four basis points to 0.88%.
West Texas Intermediate crude decreased 3.6% to $35.01 a barrel.Gold dipped to $1,726 an ounce.
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