Asian stocks falter as US data reinforces worries over coronavirus
Australian shares slid 1.85% and Seoul's Kospi ticked down 0.2%
Asian shares wobbled on Friday as abysmal economic data from the US and rising global Covid-19 cases weighed on sentiment, despite strong US tech earnings and signs of manufacturing recovery in China and Japan.
After rising in early trade, MSCI's broadest index of Asian shares outside Japan turned lower by late morning. It was last down by 0.22 per cent.
Australian shares slid 1.85 per cent and Seoul's Kospi ticked down 0.2 per cent. Japan's Nikkei dropped 1.87 per cent as a stronger yen weighed on exporters.
Chinese blue-chips were down 0.29 per cent.
"We are seeing some tentative signs of an improvement in global trade flows as economies reopen, but the overhang from recessionary conditions in the developed world and rising infection rates are kind of a focus for investors at the moment," said Ryan Felsman, senior economist at CommSec in Sydney.
The US dollar was also set for its worst month in a decade amid expectations the government will maintain its ultra-loose monetary policy for years.
The US gross domestic product collapsed at a 32.9 per cent annualised rate in the second quarter, the deepest decline on record, while unempliyment claims rose last week.
However, the futures resolutely pointed to a positive open on Wall Street on Friday after Apple, Amazon, Facebook and Alphabet reported quarterly earnings on the same day for the first time ever, all topping Wall Street estimates.
"All of them punched the lights out with respect to their earnings numbers," said National Australia Bank strategist Ray Attrill. "It looks like it should be a pretty risk positive run into the weekend."
Deemed "stay-at-home" winners as millions of Americans were ordered indoors to contain the Covid-19 outbreak, shares of the largest US technology companies have hit record highs in recent months as the pandemic has thrown the economy into its steepest contraction since the Great Depression.
US stock markets, oil prices and the dollar slid on Thursday as the new data underscored the deep economic impact of the coronavirus and the US President Donald Trump raised the possibility of delaying the November election.
Published: July 31, 2020 11:48 AM