Asian Shares slumped after Wall Street, Europe recovered
The Dow Jones dropped by 2.09%, the selective S&P 500 lost 1.59%, and the Nasdaq composite index shed 1.06%.
Nikkei slumped by 0.96% amid growing fears of an increase in coronavirus.
The Kospi lost 0.35%, and the Hang Seng fell by 0.84%.
STOXX 600 index rebounded by 1% supported by the mining sector.
Wall Street had the worst session since October
Wall Street closed in red this Monday. Its main indicator, the Dow Jones, dropped by 2.09% or 725.81 points, to 33,962.04. It’s been the worst session the New York Stock Market has experienced since last October due to the strong reaction to the surge in new covid-19 cases.
The selective S&P 500 lost 1.59% or 68.67 points, to 4,258,49.
The Nasdaq composite index shed 1.06% or 152.25 points, to 14,274.98.
Wall Street’s three benchmarks continued the decreases accumulated last week. Stocks fall worsened by the decline in 10-year treasury bonds. They reached their lowest levels in the previous five months, decreasing to 1.17%. On the other hand, oil slipping more than 7% to 66.42 dollars a barrel has been one of the reasons for the negative session on Wall Street.
The Delta variant of the coronavirus advanced worldwide. Analysts fear that it will slow down the growth of the global economy.
Last week, an average of 30,000 new cases of coronavirus was registered in the US, compared to 11,000 new infections in June.
The Cboe Volatility Index climbed by 6 points to 24.8 with a significant fall on Wall Street, reaching its highest level since last May.
The energy stocks had the most critical day
Airlines were the most vulnerable to the return to the restrictive measures of the pandemic. United Airlines, Delta Air and American Airlines sank more than 5%.
Other companies strongly related to global growth also suffered a bad session. Boeing slipped by 4.9%, General Motors shed 2.31%, and Caterpillar yielded 1.8%.
Mike Wilson, Morgan Stanley chief market strategy officer, stated that the market seems to take a more defensive stance.
The drop in oil prices dragged the energy sector, and it was the most affected on Wall Street, falling by 3.59%. ConocoPhillips lost more than 3%, Exxon Mobil declined by 3.4%, and Chevron yielded 2.70 %.
All sectors ended in red. The financial sector lost 2.80%, raw materials slumped by 2.18%, and the industrial sector shed 2.14%.
Among the thirty Dow Jones stocks, none of them managed to close the day with gains. Boeing was the most affected, slipping by 4.94%. American Express followed it with a decline of 4.24%. Meanwhile, Honeywell International dropped by 4.20%, and Dow Inc lost 3.70%.
Nikkei slumps due to virus worries
Japan’s Nikkei dropped to a six-month low on Tuesday, echoing the trajectory of Wall Street stocks amid growing fears of an increase in coronavirus globally.
Nikkei slumped by 0.96%, 264.58 points, to 27,388.16.
The Topix lost an equal 0.96% or 18.24 points to stand at 1,888.89. Both indices ended in the red for the fifth straight session.
The arrival of tens of thousands of foreign visitors to the Olympics continues to cause concern in the Japanese public. Coronavirus cases rise despite the current state of emergency in Tokyo, and new infections could lead to more infectious and deadly variants.
Soichi Arisawa of IwaiCosmo Securities stated that investors are increasingly worried about the slowdown in economic recovery.
On Thursday and Friday, Markets in Japan will be closed due to public holidays and the opening of the Tokyo Olympics.
The mining sector reaped the significant declines of the day, along with real estate and non-ferrous metals.
Inpex posted the biggest slip among Nikkei-listed companies, slipping by 4.53%. It was followed by advertising agency Dentsu, whose shares decreased by 4.2%.
The manufacturer of components for semiconductors accumulated the highest volume of operations of the day and rose by 3.43%.
Transactions followed it by the video game developer and distributor Nintendo, which fell 2.15%. The automotive manufacturer Toyota yielded 1.31%.
The Softbank Group sank by 1.56%, and the technology Sony lost 2.24%.
In the first section, 1,656 companies fell. Meanwhile, 441 shares advanced, and 95 closed unchanged. The trading volume amounted to 2.39 trillion yen.
South Korea’s Kospi shed 0.35%
The Seoul Stock Exchange fell today in a third consecutive session due to fears that the rise in Covid-19 infections worldwide would compromise recovery.
The Kospi lost 0.35% or 11.34 points to 3,232.7. The Kosdaq technology index fell 6.9 points or 0.59%, to 1,043.64.
Foreign traders were net sellers, although purchases by institutional and retail investors prevented further declines.
Seoul was governed by the uncertainty about the increase in delta variant of the coronavirus and its influence on the recovery prospects for the second half of the year.
Tech giant Samsung Electronics closed flat, while second-largest memory chip maker SK Hynix shed 0.42%.
Naver, the largest internet search engine operator in South Korea, dropped by 0.9%. Kakao, the owner of the country’s most popular messaging application, decreased by 1.3%.
In the biopharmaceutical sector, Samsung Biologics slumped by 0.33%. On the other hand, its competitor Celltrion climbed by 3.8%.
The largest South Korean vehicle manufacturer, Hyundai Motor, succumbed by 0.22%.
Technology companies drag the Hang Seng down
The Hang Seng, the Hong Kong Stock Exchange benchmark index, fell by 0.84%, or 230.53 points, to 27,259.25. The losses of technology companies weighed it down, recently subjected to greater scrutiny by the regulators and insurance and real estate companies.
The Hang Seng China Enterprises declined by 0.94%.
Most of the big tech companies ended in the red. Tencent slipped by 1.27%, Meituan declined by 0.36%, and Xiaomi lost 1.78%.
However, Alibaba had a positive day, adding 0.10%.
All sub-indices closed in the negative territory. Commerce and Industry shed 0.87%, Services dropped by 0.07%, Real Estate yielded 1.08%, and Finance slipped by 0.80%.
The worst performer of the day was Ali Health, Alibaba’s health insurance subsidiary. It collapsed by 7.39%. CG Services followed it with a loss of 3.69%, and Petrochina yielded 3.57%.
As for the companies which profited today, they were few. The Haidilao restaurant chain climbed by 3.46%, and MTR Corporation enjoyed a rise of 2.36%.
European stocks rebounded from their worst decline this year
After their worst sell-off this year, European stocks steadied today.
The STOXX 600 index increased by 1% in early trading.
A handful of upbeat corporate earnings and production updates from miners such as BHP Group and Anglo American supported the market. As a result, the mining sector led the gains to advance by 1.6%.
According to Madison Faller, global strategist at JPMorgan Private Bank, the stock market is set to keep increasing in the coming months. Even though infections are growing, hospital utilization rates are lower than they were at the peak of the coronavirus crisis.
Worries about the Delta variant spread caused Stoxx 600 to lose 2.3% on Monday. It was the worst decline since December.
However, despite concerns over high equity valuations, investors don’t have many alternatives to stocks as bond yields remain pessimistic.
Swiss bank UBS expanded by 4.6% after posting a 63% jump in second-quarter net profit. A booming wealth management business helped it. On the other hand, Peer Credit Suisse raised by 1.8%.
As for the declines, Sweden’s AB Volvo shed 3.6% due to its announcement about further production disruptions this year.
Home appliances maker Electrolux plunged by 8.7% after reporting a lower-than-expected second-quarter operating profit. The company warned that global supply chain woes would worsen in the coming months.