Stocks down on fresh lockdown worries

23 September, 2020 12:00 AM printer

HONG KONG: Asian shares extended losses for the second day on Tuesday while the dollar rose, as possible delays in expanded U.S. stimulus and concerns about fresh pandemic lockdowns in Europe knocked investor sentiment.

Hong Kong shares of HSBC and Standard Chartered fell more than 2per cent each, as global banking stocks remained under intense pressure on reports about financial institutions allegedly moving illicit funds, report agencies.

British lenders HSBC and StanChart were among global lenders named as having transferred more than US$2 trillion in suspect funds over nearly two decades.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.5per cent.

Australia’s S&P/ASX 200 dropped 0.7per cent pressured by miners and energy stocks, while China’s blue-chip index shed 0.1per cent and Hong Kong’s Hang Seng index was down 0.5per cent. Japanese markets were closed for a public holiday.

After-hours trade pointed to further selling pressure on Wall Street on Tuesday, with S&P 500 futures down 0.2per cent in early Asia and Nasdaq 100 futures off 0.4per cent.

“We can’t see any positive news on the horizon in the near-term for the markets to rebound,” said Steven Leung, executive director for institutional sales at Hong Kong brokerage UOB Kay Hian.

Overnight on Wall Street, the Dow Jones Industrial Average fell 1.84per cent, the S&P 500 lost 1.16per cent, and the Nasdaq Composite dropped 0.13per cent.

U.S. stocks have tumbled over the past three weeks as investors dumped heavyweight technology-related shares following a stunning rally that lifted the S&P 500 and the Nasdaq to new highs.

JPMorgan Chase & Co and Bank of New York Mellon Corp fell 3.1per cent and 4.0per cent, respectively, on Monday.

“The question is whether or not the residue of that impacts the performance of regional financials,” said CommSec market analyst Tom Piotrowski in Sydney.

The coronavirus also remains front and centre of investor concerns.

New pandemic measures in the UK set off declines in airline, hotel and cruise companies in both European and U.S. markets, spurring fears about further restrictions.

The Telegraph newspaper reported Prime Minister Boris Johnson will encourage Britons on Tuesday to go back to working from home. Any fresh coronavirus restrictions would threaten a nascent recovery and further pressure equity markets.

Concerns are also growing about a delay in stimulus measures after the U.S. Congress has remained deadlocked for weeks over the size and shape of another coronavirus-response bill, on top of the roughly US$3 trillion already enacted into law.