June 24, 2020 / 12:02 AM / 12 days ago

Asian stocks under pressure after spike in coronavirus cases

NEW YORK (Reuters) - Asian stocks were expected to come under pressure on Wednesday, as a spike in new coronavirus infections weighed on sentiment, although U.S. assurances that the China trade deal was intact and upbeat economic data provided some reasons for optimism.

FILE PHOTO: People wear protective face masks, following an outbreak of the coronavirus disease (COVID-19), as they are reflected in a screen displaying NASDAQ movements outside a brokerage in Tokyo, Japan March 16, 2020. REUTERS/Edgard Garrido

Kyle Rodda, market analyst at IG Markets, said late selling seen in Wall Street suggested a “soggy start” for Asian markets.

“We expect something of a positive start for Asian trade, but we will have overhanging concern about the virus itself and a second wave unfolding,” said Kyle Rodda, market analyst at IG Markets. “The market is clinging on to a recovery as much as it can.”

Australian S&P/ASX 200 futures YAPcm1 rose 0.15% in early trading.

Japan's Nikkei 225 futures NKc1 fell 0.02%. Hong Kong's Hang Seng index futures .HSI HSIc1 lost 0.01%.

On Wall Street, the Dow Jones Industrial Average .DJI ended 0.5% higher, the S&P 500 .SPX gained 0.43% and the Nasdaq Composite .IXIC added 0.74%.

However, the three major indexes pared gains from highs of more than 1% earlier in the session on Tuesday.

Coronavirus cases in the U.S. surged 25% in the week ended June 21 compared from the week before, according to a Reuters analysis.

U.S. states including Texas and Arizona set records in their outbreaks. The European Union is prepared to bar U.S. travellers because of the surge of cases in the country, putting it in the same category as Brazil and Russia, the New York Times reported on Tuesday.

“For now markets are having trouble with the implications given the high bar to re-imposing restrictions,” according to a research note from the National Australia Bank.

Remarks from U.S. Treasury Secretary Steven Mnuchin helped boost the mood on Wall Street. He said the next U.S. stimulus bill will focus on getting people back to work quickly and that he would consider a further delay of the tax filing deadline.

MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 0.90%.

The euro jumped to one week highs after positive economic data on Tuesday, and other high-risk currencies strengthened.

The dollar index =USD fell 0.228%, with the euro EUR= up 0.01% to $1.1307.

Oil prices pulled back after hitting their highest since early March, on expectations that U.S inventories will hit a record high for a third week in a row.

U.S. crude CLc1 recently fell 0.89% to $40.01 per barrel and Brent LCOc1 was flat on the day.

Reporting by Jessica DiNapoli in New York; Editing by Sam Holmes

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