SHANGHAI / NEW YORK (Reuters) – Asian shares fell in lower trading on Friday afternoon, reversing earlier gains as rising COVID-19 issues in China reinforced investor concerns about what is happening. prospects for global economic recovery.
European courses were expected to open lower. Euro Stoxx 50 Pan-region futures fell 0.66% in early trading, while German DAX futures lost 0.65% and FTSE futures fell 0.35%.
Earlier on Friday, the Asian regional sector index had approached higher levels than it was after US President Joe Biden proposed a $ 1.9 trillion stimulus plan to boost the world’s largest economy accelerate its initiation and response to COVID-19.
In prime-time comments, Biden outlined a $ 415 billion proposal targeting the COVID-19 response, some $ 1 trillion in direct relief for households, and about $ 440 billion for small businesses and communities hard hit by the pandemic.
But that initial rise escaped in the afternoon as risk appetite plummeted, bond prices and the dollar rose, and regional wages hit.
“When you reach those high levels, what does it take to bring the (market) higher again?” said Stephen Innes, Axi’s chief global markets strategist.
“Ultimately, the market has been great. I’m not saying he’s gotten too far over his skis, I don’t think so, but I do think the prospects for an economic recovery are pretty amazing … (yes us) back again to a lack of economic conviction. ”
Global stocks first confirmed on Thursday a report that the stimulus package could be as much as $ 2 trillion, far more than markets expected.
Biden’s comments came after Federal Reserve Chairman Jerome Powell struck a dovish tone in remarks at a keynote conference with Princeton University.
Powell said the U.S. central bank is not raising interest rates anytime soon and rejected suggestions that the Fed could start reducing bond purchases soon.
MSCI’s broadest index of Asia-Pacific shares outside Japan was last down 0.59%.
Chinese blue jackets skim 0.97% amid concerns over rising COVID-19 cases in China, and after China’s central bank drains liquidity from the country’s banking system, suggests a sharp bias in policy money.
There are more than 28 million detainees in China. On Friday it reported the highest number of new COVID-19 cases in more than 10 months.
Hong Kong’s Hang Seng fell 0.29% and Australia’s ASX 200 was flat, while Japan’s Nikkei lost 0.65% after touching a three-year high in the previous session.
The falls in Asia were like a late downturn on Wall Street on Thursday. While U.S. stocks spent most of the trading session in a positive range, aided by the stimulus expectations, concerns about the cost of the package caused a slight decline to the end of Wall Street trading.
S&P 500 e-mini futures are peaking 0.61% to 3,768.
“This is a tax-driven concern,” said Tim Ghriskey, Inverness Councillor’s chief investment strategist for New York.
“It’s easy to spend money but the question is how do you pay for it? Markets often evade politics but often do not evade taxes. ”
The Dow Jones industrial average fell 0.22%, the S&P 500 lost 0.38%, and the Nasdaq Composite fell 0.12%.
On Friday, a season of earnings begins at full capacity with results from JPMorgan, Citigroup and Wells Fargo. Investors are looking to see if banks start removing credit stocks, resuming purchases, and provide guidance that shows the economy is getting better, Thomas Hayes said, chairman of Great Hill Capital in New York.
In the currency market, the US dollar was flat against the yen at 103.79 and the dollar index rose 0.1% to 90.35.
The euro fell 0.16% to $ 1.2136.
U.S. output rebounded as risk appetite declined. Finance 10-year benchmark notes fell 1.1005%, down from a U.S. close of 1.129% on Thursday, while 30-year yield fell to 1.8409% from 1.874%.
Oil prices, which had soared on a weak dollar and strong Chinese import data, fell when COVID-19 concerns in China hit sentiment.
Brent crude oil futures fell 0.83%, to $ 55.95 a barrel while U.S. crude lost 0.54% to $ 53.28.
Spot gold rose 0.11% to $ 1,848.36 an ounce.
Reporting with Andrew Galbraith in Shanghai and Chibuike Oguh in New York; Edited by Sam Holmes, Kim Coghill and Lincoln Feast.