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ASIAN STOCKS RETREAT AS CHINA GETS SCORES OF COVID-19 INFECTIONS

Asian markets started the week on the backfoot on Monday while oil prices slipped as fears of a second wave of coronavirus infections in China sent investors scurrying for safe-havens, Reuters reported on June 15, 2020.


MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.25% with Australian shares off 0.4% and South Korea slipping 0.6%. Japan’s Nikkei fell 0.75%. The losses follow a strong rally in global equities since late March, fueled by central bank and fiscal stimulus and optimism as countries gradually lifted restrictions put in place to curb the spread of the novel coronavirus.

However, risk sentiment took a knock after Beijing recorded dozens of new COVID-19 cases in recent days, all linked to a major wholesale food market. Investors are also fretting over a spike in cases in the US. Another large coronavirus outbreak could roil financial markets, which had been rallying recently on hopes for economic recovery.

Some analysts were still hopeful Monday’s sell-off will be temporary. “We assume that any second wave is likely to be more manageable than the first given earlier policy experience,” analysts at Morgan Stanley wrote in a note. “Policy easing will also help Asia (excluding Japan) get back on its feet better.” The Chinese yuan dipped in offshore trade to 7.0877 per dollar while the risk-sensitive currencies of Australia and New Zealand were also sold off. Both were last down 0.4% at $0.6855 and $0.6424, respectively.

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