By Gina Lee
Investing.com – Asian stocks were mostly down on Friday morning in Asia, following the lead set by European and U.S. shares overnight, as the COVID-19 pandemic rages on and hopes dim for a quick ending.
Worries over logistical issues in mass-producing and transporting vaccines, as well as the ever-increasing number of cases in Europe and the U.S. are sparking fears that more countries will re-impose lockdowns, overshadowing the slew of positive news from vaccine developers.
Pfizer Inc (NYSE:PFE) and BioNTech (F:22UAy) announced positive results for their candidate BNT-162b2 on Monday, Russia said on Wednesday that its Sputnik V vaccine candidate showed 92% efficacy, and Moderna Inc (NASDAQ:MRNA) said on the same day that the accumulation of data for a first analysis of its vaccine mRNA-1273 is complete, with an announcement on the vaccine's efficacy expected by the end of the month.
With New York City already preparing for the possibility of school closures and Chicago urging residents to stay at home, some investors were bracing for a few more months of hardship.
“We’re experiencing a bit of exhaustion for the market as we focus on the troubling near-term COVID-19 trends and the potential for a few tough months ahead,” StoneX global market strategist Yousef Abbasi told Bloomberg.
Uncertainty over the latest U.S. stimulus measures also remains, with President Donald Trump leaving the revival of negotiations with House of Representatives Speaker Nancy Pelosi.
Japan’s Nikkei 225 slid down 1% by 11:01 PM ET (3:015 AM GMT). South Korea’s KOSPI edged up 0.14%, reversing some earlier gains.
In Australia, the ASX 200 was down 0.33%. Australia-China relations soured further after China blamed Australia for the mounting tensions. “For some time, Australia has been violating basic norms governing international relations and made erroneous words and deeds on issues concerning China’s core interests, including those related to Hong Kong, Xinjiang and Taiwan, and blatantly interfered in China’s internal affairs," Chinese Ministry of Foreign Affairs spokesman Wang Wenbin said on Thursday. In response, Australia said that it will seek to resolve the differences through diplomatic and other official channels.
Hong Kong’s Hang Seng Index was down 0.23%. The city recorded 23 COVID-19 cases on Thursday, the most since Sep. 20, prompting worries of a fourth wave. Kindergartens were also shut for two weeks due to nearly 180 cases of upper respiratory tract infections. Hong Kong's Legislative Council also remains in limbo as all its opposition lawmakers resigned over a new patriotism requirement implemented by Beijing earlier in the week. The requirement initially saw four lawmakers disqualified from their seats.
China’s Shanghai Composite fell 0.82% and the Shenzhen Component was down 0.75%. Tensions between China and the U.S. also rose after Trump signed an executive order prohibiting U.S. investment in Chinese firms determined to be owned or controlled by the Chinese military, with China “increasingly exploiting” U.S. capital for “the development and modernization of its military, intelligence, and other security apparatuses,” the order said.
Meanwhile, China is due to join 14 other Asia-Pacific nations in signing the Regional Comprehensive Economic Partnership (RCEP) free trade agreement on Nov. 15, the final day of the 37th ASEAN Summit.
Investors were further reminded of the risks to economic recovery at another event, after central bank heads sounded a warning note during Thursday’s European Central Bank (ECB)’s “Central Banks in a Shifting World” forum.
“We do see the economy continuing on a solid path of recovery, but the main risk we see to that is clearly the further spread of the disease here in the U.S. ... the next few months could be challenging,” Federal Reserve Chairman Jerome Powell said in a panel discussion alongside ECB President Christine Lagarde and Bank of England Governor Andrew Bailey.
“From a huge river of uncertainty, we see the other side now,” Lagarde said. “But I don’t want to be exuberant about this vaccination because there is still uncertainty” over its production and distribution, she quickly added.