Asian shares slip on pandemic worries despite Wall St rally

Business

A currency trader walks near the screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room in Seoul, South Korea, Thursday, April 29, 2021. Asian shares rose Thursday and U.S. futures also were higher after President Joe Biden delivered a speech to Congress that outlined ambitious plans for jobs creating spending on early education, child care and other public services. (AP Photo/Lee Jin-man)

TOKYO (AP) — Asian shares were mostly lower Friday amid uncertainty about the prospects for a global economic recovery from the coronavirus pandemic.

Japan’s benchmark Nikkei 225 dipped 0.5% in morning trading to 28,900.98. South Korea’s Kospi slipped 0.7% to 3,150.48. Australia’s S&P/ASX 200 fell 0.6% to 7,042.60. Hong Kong’s Hang Seng lost 1.4% to 28,883.41, while the Shanghai Composite slipped 0.6% to 3,454.76.

The regional market dips came despite reports of strong economic growth in South Korea and a 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 a 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 traveling within Japan over the Golden Week holidays that last through next week.

On Wall Street Thursday, stocks overcame a midday stumble to close broadly higher, driving the S&P 500 0.7% higher to another record close. Communications companies helped power much of the gain, led by a sharp rise in Facebook following the company’s latest quarterly report card. Banks also helped lead the rally, outweighing a pullback in health care and technology stocks. Treasury yields were mixed.

Investors weighed the latest batch of company earnings reports and encouraging economic data. A report showing that the U.S. economy grew sharply in the first quarter added to data pointing to a recovery from the recession brought on by the pandemic. Other upbeat reports included data showing that more Americans were signing contracts to buy homes in March after two months of declines.

“We’re experiencing a strong economic recovery that’s translating into a strong corporate earnings environment,” said Bill Northey, senior investment director at U.S. Bank Wealth Management.

The S&P 500 index rose 28.29 points to 4,211.47. The index also hit an all-time high on Monday. The Dow Jones Industrial Average added 0.7% to 34,060.36, while the Nasdaq gained 0.2% to 14,082.55. Both indexes had slipped earlier in the day.

Smaller company stocks, which have been outperforming the broader market this year, gave back some of their recent gains. The Russell 2000 index lost 0.4%, to 2,295.46.

The rollout of COVID-19 vaccinations, massive support from the U.S. 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.

“Without one of those two, the macroeconomic direction seems clear,” he said.

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% 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% 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% and General Motors fell 3.4%.

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%, Uber lost 6% and Lyft sank 9.9%.

On the economic front, the Commerce Department said that the U.S. economy grew at a brisk 6.4% 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 U.S. 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 U.S. dollar fell to 108.76 Japanese yen from 108.93 yen. The euro fell to $1.2118, little changed from $1.2122.

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AP Business Writers Damian J. Troise and Alex Veiga contributed.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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