July 7, 2020 / 11:59 PM / a month ago

Asian shares mixed as corporate earnings loom

NEW YORK (Reuters) - Asian stocks were set for a mixed open on Wednesday, as an increase in new coronavirus cases in some parts of the world cast doubts over the economic recovery, leading some investors to cash in on recent gains ahead of earnings season.

FILE PHOTO: A man wearing a protective face mask following an outbreak of the coronavirus disease (COVID-19) walks past a screen displaying the world's markets indices outside a brokerage in Tokyo, Japan, March 17, 2020. REUTERS/Issei Kato

Australian S&P/ASX 200 futures YAPcm1 lost 0.50% in early trading, while Japan's Nikkei 225 futures NKc1 added 0.11%, and Hong Kong's Hang Seng index futures .HSI HSIc1 rose 0.39%.

U.S. stocks fell on Tuesday, halting a five-day winning streak by the benchmark S&P 500 index, its longest this year, which had been driven by better-than-expected economic data.

Following the recent rally, the declines looked like a consolidation, with the markets largely in “wait and see mode” ahead of the upcoming earnings session, said NAB economist Tapas Strickland.

“It will be important to watch the number of U.S. deaths in coming weeks and whether greater questions will be asked about the extent of necessary restrictions,” he added.

The United States reported tens of thousands of new coronavirus infections, prompting New York to expand its travel quarantine for visitors from three more states, while Florida’s greater Miami area rolled back its reopening.

The surge has made business owners “nervous again,” Atlanta Federal Reserve Bank President Raphael Bostic said on Tuesday. “There is a real sense this might go on longer than we have planned for,” he said.

Coronavirus cases were also on the rise in the Australian state of Victoria, which led to lockdown measures being reimposed in Melbourne, the country’s second-biggest city.

“The second wave of infection will see Victorian economic activity fall sharply and it will continue to lag the rest of Australia,” said NAB economist Kaixin Owyong.

Victoria makes up around a quarter of Australian economic activity, she said.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.78% lower.

The Dow Jones Industrial Average .DJI fell 1.51%, the S&P 500 .SPX lost 1.08%, and the Nasdaq Composite .IXIC dropped 0.86%.

E-mini futures for the S&P 500 EScv1 were up 0.13%.

Concern over the rise in new coronavirus cases helped lift safe-haven assets, including the U.S. dollar, which was 0.15% higher at 96.889, against a basket of currencies.

The benchmark 10-year US10YT=RR yield was down at 0.6397%, from 0.648% late on Monday.

Spot gold XAU= jumped 0.7% to $1,796.08 per ounce.

Reporting by John McCrank; Editing by Sam Holmes

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