By Gina Lee
Investing.com – Asia Pacific stocks were mostly down on Monday morning, with risk appetite sapped by a rapidly-spreading new strain of COVID-19 in the U.K., despite the progress made on the latest U.S. stimulus measures.
Described by U.K. Health Secretary Matt Hancock as “out of control,” the discovery of the new strain saw London enter an emergency Tier 4 lockdown. The lockdown sees 16 million Britons in London and southeastern England stay at home, just days before the Christmas holidays.
European neighbors, including France, Germany, Italy, the Netherlands, Ireland and Belgium have closed their borders to travelers, and in some cases freight from the U.K. Other countries, such as Canada, Argentina and Chile have also banned flights from the U.K., with other countries considering similar bans.
Japan’sNikkei 225 fell 0.56% by 10:12 PM ET (3:12 AM GMT). South Korea’s KOSPI was down 0.39%. The country reported 926 daily cases on Monday, after seeing cases exceed the 1,000 mark over the weekend.
In Australia, the ASX 200 was down 0.21%. Sydney’s 5 million residents are also battling a COVID-19 outbreak in the city that originated in the northern beaches area. Lockdowns currently in place in the area are set to be reviewed on Wednesday, but other states and territories quickly closed their borders, leading to flight cancellations and disruptions in Christmas plans.
Hong Kong’s Hang Seng Index inched down 0.08%.
China’s Shanghai Composite was up 0.56% and the Shenzhen Component jumped 1.19%. The People’s Bank of China left its benchmark lending rate for corporate and household loans steady for an eighth consecutive month at its December fixing on Monday, as per market expectations. The one-year loan prime rate was unchanged at 3.85%, while the five-year loan prime rate remained at 4.65%.
U.S.-China tensions also rose as Beijing threatened to impose countermeasures after the U.S. Commerce Department blacklisted more than 60 Chinese companies, including Semiconductor Manufacturing International Corp., “to protect U.S. national security” on Friday.
Meanwhile, news of the U.K.’s lockdown overshadowed the progress made towards passing the latest stimulus measures in the U.S. Although the text of the $900 billion bill is still being written, the House of Representatives is due to vote on it later in the day, followed by the Senate.
Senate Majority Leader Mitch McConnell said that “at long last we have a bipartisan breakthrough” that was needed to get the bill passed in the House and Senate.
On the vaccines front, the Food and Drug Administration also granted emergency use approval for Moderna Inc's (NASDAQ:MRNA) vaccine mRNA-1273 over the weekend. Inoculations are due to begin on Monday.
Despite warnings not to view vaccines as a panacea to COVID-19, some investors were encouraged by the approval of mRNA-1273, following the approval for Pfizer Inc (NYSE:PFE) and BioNTech SE's (F:22UAy) vaccine BNT162b2.
“For many, the end of 2020 cannot come soon enough … the pathogen has wrought mayhem across financial markets and so we expect the New Year wish of many market participants to be that the arrival and initial distribution of coronavirus vaccines now signals light at the end of a very tiring and debilitating tunnel,” First Abu Dhabi Bank Pjsc chief economist Simon Ballard told Bloomberg.