Asian stocks sink after Wall St losses on economy worries

BEIJING (AP) — Asian stock markets followed Wall Street lower Friday on worries economic recoveries might fade as coronavirus cases increase in the United States and some other countries.

Benchmarks in Shanghai, Tokyo, Hong Kong and Southeast Asia retreated a day after strong gains driven by the rise of U.S. tech stocks.

Global stock prices have recovered most of this year’s losses on optimism about a recovery from the coronavirus pandemic. But forecasters warn the rise might be too big and too fast to be supported by uncertain economic conditions.

On Wall Street, the benchmark S&P 500 index lost 0.6% overnight.

“The market is concerned about the uptick in cases globally,” said Stephen Innes of AxiCorp. in a report. “Money is funneling into perceived safe areas of the market like tech, which should hold up broader indexes to a degree.”

The Shanghai Composite Index lost 1.2% to 3,408.93 and the Nikkei 225 in Tokyo shed 0.7% to 22,368.44. The Hang Seng in Hong Kong retreated 1.9% to 25,702.64.

The Kospi in Seoul lost 1.2% to 2,141.63 and Sydney’s S&P-ASX 200 declined 0.6% at 5,917.60. India’s Sensex opened 0.6% lower at 36,523.82. New Zealand, Jakarta and Bangkok retreated, while Singapore markets were closed.

On Wall Street, the S&P 500 declined to 3,152.05. The Dow Jones Industrial Average dropped 1.4% to 25,706.09.

Three out of four stocks in the S&P declined. The biggest losers were oil companies, airlines and other stocks that are most heavily affected by a reopening and strengthening economy.

The Nasdaq composite, dominated by tech stocks that are seen as relatively resilient to the pandemic, added 0.5% to a record 10,547.75.

U.S. government data showed 1.3 million workers filed for unemployment claims last week. That is down from 1.4 million the prior week and a peak of nearly 6.9 million in late March.

The improvements have helped validate investors’ optimism that the economy can recover as anti-virus controls are relaxed. That helped the S&P 500 rebound to within 7% of its record, after being down nearly 34%.

But economists point to a troubling slowdown in the pace of such changes, including moderating declines in the four-week average of jobless claims.

Investors are worried that worsening infection levels in the populous U.S. states of Florida, Texas and California could derail a recovery. Some states are rolling back their reopenings, while others are ordering people arriving from hotspots to quarantine.

Other countries including Brazil and South Africa also report rising case totals. Australia’s populous state of Victoria closed its border with neighboring New South Wales this week to contain an outbreak.

In energy markets, benchmark U.S. crude lost 70 cents to $38.92 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, declined 63 cents to $41.72 per barrel in London.

The dollar declined to 106.94 yen from Thursday’s 107.95. The euro edged down to $1.1271 from $1.1286.