Home PoliticsAmerica Asian Markets Retreat
Asian Markets

Asian markets mostly fell Tuesday following a sharp pullback on Wall Street as investors were spooked by a coronavirus surge, new lockdowns, a slow vaccine rollout and uncertainty over US Senate elections.

While analysts are broadly upbeat about the long-term outlook this year, the nascent inoculation programmes have yet to have an impact, meaning the first few months of the year will likely be bumpy.

And the task ahead was laid bare by data showing almost 280,000 Americans were infected in one day, while the country’s death toll passed 300,000.

And as a new, potentially more transmissible strain rampages around the world, governments are being forced to tighten containment measures again, with England going into a six-week full lockdown after officials warned hospitals could soon face collapse.

Such measures are fuelling concerns the already stuttering economic recovery could be jolted off course in the first quarter, while the rollout of vaccines has been slower than hoped, adding to the market jitters.

“The first quarter will no doubt be tough; the spread has been horrific throughout the festive period and restrictions are being tightened and extended,” said Craig Erlam, senior market analyst at OANDA.

“The toll on the economy will be significant but, thanks to the vaccine, consigned mostly to the first quarter.”

All three main indexes on Wall Street fell more than one percent, having ended 2020 at or near record highs, with dealers there also keeping tabs on runoff senate elections in Georgia, which will decide the balance of power in the upper house of Congress.

Both Democratic candidates hold narrow leads going into the vote Tuesday, and observers said there are concerns on trading floors that a win for the party would give them control of Capitol Hill and power to pass market-unfriendly measures such as tax hikes and tighter regulation.

Markets have been buoyed in recent months by the prospect of Republicans holding the Senate and provide a check on the Democrats but analysts said a “blue wave” scenario has spooked investors.

– Light at end of the tunnel –

“To date, investors are comfortable with a Republican-controlled Senate that would offer a balance against the potentially more progressive agenda of the Democrats under President-elect (Joe) Biden,” said Axi strategist Stephen Innes.

“If the Democratic Party… (controls) both houses, we could see an equity market correction, especially if investors worry that such checks and balances around tax and tech regulation will disappear.

“This will have an important impact on the expansiveness or limits on the Biden presidency over the next two years. The bottom line is the market hates uncertainty.”

However, Gorilla Trades strategist Ken Berman added: “Most analysts agree that a Democratic sweep would pose a risk for stocks, but with all the positive trends in mind, it’s unlikely that bulls will have to deal with anything more than an orderly correction in stocks.”

Asian equities struggled Tuesday. Tokyo, Hong Kong, Sydney, Seoul, Singapore, Shanghai, Manila and Jakarta all fell, though there were gains in Taipei, Bangkok and Wellington.

But analysts remain upbeat about the future.

“The light at the end of the tunnel is there for all to see and it grows brighter by the week,” said Berman.

“There have been setbacks — new variants, for example — which are undoubtedly a blow and there may be more. But as things stand, there’s plenty of reason for optimism this year, which will make a nice change compared to the one we’ve just slammed the door shut on.”

Oil prices edged up slightly but remained under pressure from immediate worries about demand as containment measures go into force, while dealers were also fretting after a meeting of OPEC and other top producers ended without agreement on new output levels for next month.

Bitcoin was sitting at $32,400 after seeing recent wild swings, that saw it hit a record near $35,000 before diving to $28,000 within the space of a day.

You may also like


Your Trusted Source for Capital Markets & Related News

© 2024 LiveTradingNews.com – For The Traders, By The Traders – All Right Reserved.

The information contained on this website shall not be construed as (i) an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities or services, (ii) investment, legal, business or tax advice or an offer to provide such advice, or (iii) a basis for making any investment decision. An offering may only be made upon a qualified investor’s receipt not via this website of formal materials from the Knightsbridge an offering memorandum and subscription documentation (“offering materials”). In the case of any inconsistency between the information on this website and any such offering materials, the offering materials shall control. Securities shall not be offered or sold in any jurisdiction in which such offer or sale would be unlawful unless the requirements of the applicable laws of such jurisdiction have been satisfied. Any decision to invest in securities must be based solely upon the information set forth in the applicable offering materials, which should be read carefully by qualified investors prior to investing. An investment with Knightsbridge is not suitable or desirable for all investors; investors may lose all or a portion of the capital invested. Investors may be required to bear the financial risks of an investment for an indefinite period of time. Qualified investors are urged to consult with their own legal, financial and tax advisors before making any investment. Knightsbridge is a private investment firm that offers investment services to Qualified Investors, Members and Institutions ONLY. Qualified Investors are defined as individuals who have met those Qualifications in the relevant jurisdictions. Members are defined as individuals who have been accepted into the Knightsbridge membership program. Institutions are defined as entities such as banks, pension funds, and hedge funds. If you are not a Qualified Investor, Member or Institution, you are not eligible to invest with Knightsbridge. All investments involve risk, and there is no guarantee of profit. You may lose some or all of your investment. Past performance is not indicative of future results. Knightsbridge is not a registered investment advisor, and this disclaimer should not be construed as investment advice. Please consult with a qualified financial advisor before making any investment decisions. By accessing this website, you agree to the terms of this disclaimer. Thank you for your interest in Knightsbridge.