Asian stocks looked set to resume declines after heavy losses on Wall Street and worries that a Covid-19 vaccine could be delayed. The dollar and Treasuries climbed.
Futures dropped in Japan, Hong Kong and Australia, and S&P 500 contracts fell about 1% in early Asia trading amid concern progress at AstraZeneca Plc has stalled in the hunt for a coronavirus vaccine. The U.S. benchmark closed almost 3% lower Tuesday, and the Nasdaq 100 almost 5% as the selloff in U.S. technology shares picked up steam. Investors fled the high flyers that fueled a historic rally with Tesla suffering the worst rout in its history. Brent crude tumbled below $40 for the first time since June as a stalling consumption recovery in Asia and increased supply from OPEC+ signaled a bleak short-term outlook.
Investors are grappling with the recent market turbulence, assessing whether the pullback for equities is a sign of market health or the start of a larger drawdown that has further to go. For now, traders are seeking the safety of haven assets, pushing Treasury yields lower and strengthening the dollar.
“The path of least resistance for the market may well be to test the downside,” said Peter Chatwell, head of multi-asset strategy at Mizuho International Plc. “Ultimately, if there is more selloff, I suspect real money investors will take the opportunity to buy the dip.”
75,809 in IndiaMost new cases today
-2% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23
-1.05 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23
5.3% Global GDP Tracker (annualized), Aug.