Asia shares drop after Wall Street rout as virus cases rise

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A woman walks past an electronic stock board showing Japan's Nikkei 225 index and New York Dow index at a securities firm in Tokyo Friday, June 12, 2020. Asian shares were moderately lower Friday after an overnight rout on Wall Street as investors were spooked by reports of rising coronavirus cases in the U.S. (AP Photo/Eugene Hoshiko)

TOKYO – Asian shares were moderately lower Friday after an overnight rout on Wall Street as investors were spooked by reports of rising coronavirus cases in the U.S.

Fear that a so-called “second wave,” is already coming has punctured bubbling optimism that a quick economic recovery was already underway. That pushed the Dow Jones Industrial Average down almost 7% on Thursday.

However, Wall Street futures pointed to a steady open on Friday, with the contract for the S&P 500 up 1% and that for the Dow industrials up 1.1%.

Japan's benchmark Nikkei 225 dipped by 2.2% but was trading 1.5% lower at 22,131.14 by midmorning.

South Korea's Kospi lost 2.5% to 2,122.62. Australia's S&P/ASX 200 skidded 1.8% to 5,851.90. Hong Kong's Hang Seng shed 1.2% to 24,195.52, while the Shanghai Composite dipped 0.7% to 2,899.16.

Losses were milder in Asia than in the U.S. partly because markets in the region have not seen massive gains in recent weeks: outbreaks of the virus, travel disruptions and business shutdowns remain apparent and hopes for a quick rebound more modest.

Although daily newly confirmed cases in Japan have fallen to double-digit levels, workers are returning to work and stores are reopening, without a strong U.S. recovery there are scant expectations for an escape from recession, analysts say.

“It appears that worries about ‘second wave’ of infections have hit, with a swell in the number of cases in states like Arizona and Texas giving cause for concern,” said Riki Ogawa at Mizuho Bank's Asia and Oceania Treasury Department, noting U.S. Treasury Secretary Steven Mnuchin has said the U.S. can't afford another lockdown.