Asian Stocks Drop On Virus Variant Worries

Virulent variants of the Covid-19 virus emerged as the villain again to play spoilsport with the Asian stock markets in the beginning of a new quarter.

China’s Shanghai Composite Index edged down 0.1 percent to close at 3,588.78 amidst data showing a dip by the Caixin China General Manufacturing PMI for June to 51.3, a three-month low from 52 in May, primarily due to an uptick in Covid-19 cases as well as supply chain disruptions. The Hong Kong Stock Exchange was closed for a local holiday.

Japan’s Nikkei 225 Index opened at 28,832.41 but soon corrected to 28,624.80 before finally closing at 28,707.04, down 0.3 percent from the previous day’s closing as the coronavirus delta variant stoked risk aversion in the stock market.

An increase in May’s unemployment to 3 percent and a slide by June’s Manufacturing PMI to 52.4 from 53.0 a month earlier eclipsed the positive sentiment attributed to the big manufacturers’ sentiment jumping to 14 in the June quarter, the highest reading since the December quarter of 2018.

Sumitomo Heavy Industries rallied 3.9 percent, followed by Hitachi Zosen Corp., which gained 2.5 percent. Mitsubishi Electric Corp declined 6.1 percent, whereas Kawasaki Kisen Kaisha shed 4.6 percent.

South Korea’s KOSPI moved 14.62 points or 0.4 percent lower to close at 3,282.06 amidst concerns over an increase in the case-loads of the Covid-19 virus.

Meanwhile, South Korea’s trade surplus in the month of June increased to $4.44 billion amid a 30.7 percent jump in exports and a 40.7 percent surge in imports. Data also showed that the IHS Markit Manufacturing PMI rose marginally to 53.9 in June from the level of 53.7 in May.

Australia’s S&P/ASX200 Index closed 0.7 percent lower at 7,265.60 as a worsening coronavirus situation and consequent lockdowns dampened sentiment.

Gold miners Regis Resources and St Barbara were the leaders in the day’s movement with Regis Resources gaining 8.1 percent and St Barbara adding 5.6 percent. Chalice Mining Ltd. shed 5.9 percent, while Iluka Resources Ltd. dropped 4.9 percent.

Australia’s trade surplus surged to a record high of AUD 9.68 billion in May as exports jumped 6 percent compared to a 3 percent increase in imports.

The IHS Markit Australia Manufacturing PMI decreased to 58.6 in June from 60.4 in May, whereas the Ai Group Australian Performance of Manufacturing Index increased to 63.2 from 61.8 during the same period.

Meanwhile, New Zealand’s NZX 50 Index added 29.03 points, or 0.2 percent, to close at 12,683.63 amidst data that showed the ANZ Business Outlook Index rose to -0.6 in June, the highest reading in 4 months, as well as a partial reopening of the trans-Tasman bubble.

Enprise group shares surged 10.2 percent following its acquisition of Very Impressive Software. TIL Logistics Group rallied 10 percent upon announcement that its founder shareholders sold down approximately 20.8 percent of shares to a range of investors.

TruScreen group jumped 7.69 percent following the announcement of the first sale made in Europe. New Talisman Gold Mines, which declared annual results on Wednesday, plunged by 25 percent.

Overnight, the Nasdaq 100 closed at 14,554.80, down by 0.1 percent, whereas the Dow Jones Industrial Average closed at 34,502.51, up by 0.6 percent ahead of the crucial monthly Non-farm Payroll data due on Friday.

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