Asian shares slide from all-time highs; Oil falls on virus cascade
© Reuters. A man wearing a protective face mask walks past a screen displaying a chart showing the latest Nikkei stock average outside a broker during the coronavirus disease (COVID-19) outbreak in Tokyo
From Swati Pandey
SYDNEY (Reuters) – Asian stocks retreated from record highs on Monday after a Reuters report the United States prepared to impose sanctions on some Chinese officials highlighted geopolitical tensions while oil prices fell on rising virus cases.
MSCI's broadest index for stocks in the Asia-Pacific region outside Japan fell 0.3% after four consecutive earnings sessions.
It's up 16% this year, the best since a 33% jump in 2017.
China's blue chip index fell 0.8%, largely ignoring strong export data, while Hong Kong's fell 1.8%.
declined 0.4% while Australian stocks rose 0.4%.
The e-mini futures for the declined 0.2% after a higher start.
The sell-off began after Reuters, citing sources, exclusively reported that the US was preparing sanctions against at least a dozen Chinese officials for their alleged role in Beijing's disqualification of elected opposition lawmakers in Hong Kong.
The move comes as President Donald Trump's administration continues to put pressure on Beijing in his final weeks in office.
"One thing the market has been concerned about is that Trump would be on the lookout for retaliation for China in his absence. So this news speaks to that fear," said Kyle Rodda, market strategist at IG Markets in Melbourne. "Ultimately, the market knows they only have six weeks left. The broader focus is still on vaccine adoption and US tax incentives."
Asian markets had initially started in hopes of a faster global recovery when coronavirus vaccines were launched in the UK starting this week.
The US authorities will continue to discuss the program this week ahead of the expected first round of vaccination this month.
We hope the vaccines will help contain the pandemic that has killed more than 1.5 million people worldwide in the past few weeks.
On Wall Street, stock indices hit new highs on Friday, with the Dow up 0.8%, the S&P 500 up 0.9% and the Nasdaq up 0.7%. ()
"The vaccine will break the link between mobility and infection rates and enable the strongest global GDP growth in more than two decades," JPMorgan (NYSE 🙂 analysts wrote in a note, forecasting global growth of 4.7% for the year 2021.
Still, expectations for a US incentive gained momentum after weak pay data last week after months of deadlocked negotiations.
The US economy hired the fewest workers in six months in November. The number of non-farm workers rose 245,000 last month, well below expectations for an increase of 469,000.
A non-partisan group of Democrats and Republicans proposed a $ 0.9 trillion compromise package, which leaders on both sides seem to be able to agree to.
In currencies, investors are focusing on the UK and European Union's final attempt to strike a trade deal this week after Brexit, with negotiators likely to have just a few days left to prevent a chaotic end-of-year separation.
If there is no agreement, a five-year Brexit divorce will end in chaos, just as the UK and its former EU partners are grappling with the high economic costs of the COVID-19 pandemic.
The pound was slightly weaker at $ 1.3430 while the single currency was up 0.1% at $ 1.2132, not far from an April 2018 high of $ 1.2177.
The risk-sensitive Australian dollar rose 0.1% to $ 0.7433.
With that, the US dollar fell 0.1% against a basket of major currencies to 90.702 after hitting a 2-1 / 2-year low last week.
In commodities, oil prices fell from their highest level since March as a sustained spike in coronavirus around the world forced a number of new locks, including tough new measures in Southern California. (OR)
was up 24 cents at $ 46.02 a barrel and 26 cents at $ 48.99. Brent has lost around a quarter of its value so far this year.
, which hit a record high of $ 2,072.49 an ounce, was last at $ 1,837.7 and is still up a whopping 21% this year.