Asian shares slip on pandemic worries despite Wall Street rally

Business Saturday 01/May/2021 17:39 PM
Asian shares slip on pandemic worries despite Wall Street rally
Photo: BNA

Tokyo: Asian shares were mostly lower Friday amid uncertainty about the prospects for a global economic recovery from the coronavirus pandemic, said AP.

The regional market dips came despite reports of strong economic growth in South Korea and moderation of the unemployment rate in Japan, despite a resurgence of the pandemic.

Major recent outbreaks and slow progress in vaccinations have added to worries about the pandemic in Asia, despite some nations such as Taiwan, South Korea and China faring relatively well in COVID-19 related illnesses and deaths.

Japan remains a poor performer on those fronts, with deaths now topping 10,000 in what experts are calling the fourth wave of infections.

Tokyo and some other urban areas are under a government-declared state of emergency, but reports say people are still going out and travelling within Japan over the Golden Week holidays that last through next week.

On Wall Street Thursday, stocks overcame midday stumble to close broadly higher, driving the S&P 500 0.7 per cent higher to another record close.

Investors weighed the latest batch of company earnings reports and encouraging economic data. A report showing that the US economy grew sharply in the first quarter added to data pointing to recovery from the recession brought on by the pandemic.

The rollout of COVID-19 vaccinations, massive support from the US government and the Fed, and increasingly positive economic data have been driving expectations for a strong rebound for the economy and robust corporate profit growth this year. That’s helped stocks push higher and kept indexes near their all-time highs.

Still, some of the big risks to the market include rising inflation getting out of hand and any aspect of the virus pandemic worsening and throwing off the economic recovery, said Keith Buchanan, senior portfolio manager at Globalt Investments.

So far, company earnings for the first three months of the year are largely exceeding Wall Street’s expectations and stoking bullish profit outlooks for 2021.

Facebook jumped 7.3 per cent after the social media giant reported stronger-than-expected results for the first quarter thanks to soaring ad revenue.

Amazon.com reported after the close of regular trading that its profit more than tripled in the first quarter. Its shares jumped 4.2 per cent in after-hours trading.

Auto companies fell sharply after Ford warned that a worsening global computer chip shortage could cut its production in half during the current quarter. Ford fell 9.4 per cent and General Motors fell 3.4 per cent.

Ride-sharing and delivery service companies also dropped following a report that Labor Secretary Marty Walsh wants gig workers to be classified as employees. DoorDash fell 7.6 per cent, Uber lost 6 per cent and Lyft sank 9.9 per cent.

On the economic front, the Commerce Department said that the US economy grew at a brisk 6.4 per cent annual rate in the last quarter. That acceleration is expected to increase through the summer as more vaccinations are administered and COVID-19 cases continue to fall.

Meanwhile, the Labor Department said the number of Americans who filed for unemployment benefits fell again last week.

In energy trading, benchmark US crude fell 37 cents to $64.64 a barrel in electronic trading on the New York Mercantile Exchange. It picked up $1.15 to $65.01 per barrel on Thursday. Brent crude, the international standard, lost 31 cents to $68.25 a barrel.

In currency trading, the US dollar fell to 108.76 Japanese yen from 108.93 yen. The euro fell to $1.2118, little changed from $1.2122.