Asian shares lower, US futures up after S&P 500 sinks 3.5%


declined Thursday and US futures turned higher after the S&P 500 slid 3.5% overnight for its biggest drop since June.

The selling in US markets followed broad declines in Europe, where the French president announced tough measures to slow the virus’ spread and German officials agreed to impose a four-week partial lockdown.

So far, the measures are not as stringent as shutdown orders that swept the world early this year, but the worry is they could still hit the already weakened global .

A currency trader walks by the screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room in Seoul, South Korea, on Thursday, October 29, 2020. Photo: AP

In Asia, some countries appear to be keeping the pandemic in check, while caseloads surge in others. India is on track to surpass 8 million confirmed COVID-19 cases, Indonesia and the Philippines are struggling to keep outbreaks in check, and fresh clusters of cases are being reported in Japan.

“When it rains, it pours, particularly if you are following today’s COVID-19 headlines,” Edward Moya of Oanda said in a commentary. “An overvalued stock market was ripe for a pullback, but when you focus on COVID-19 headlines, it looks more like panic-selling.”

The Bank of Japan kept its ultra-loose monetary unchanged in a meeting that ended Thursday. But it downgraded its outlook for the economy, saying that while conditions will eventually improve, “risks to both economic activity and prices are skewed to the downside, mainly due to COVID-19.”

Retail sales in Japan, the world’s third largest economy, fell 8.7% from a year earlier in September, according to data reported Thursday. While purchases of goods has recovered somewhat, services remain weak.

The Japanese central bank has been pumping tens of billions of dollars into the economy every year, trying to restore stable growth as the country’s population shrinks and ages. Japan was already in recession when the pandemic began.

In Thursday trading, Hong Kong’s Hang Seng lost 1% to 24,452.65 while the Nikkei 225 in Japan fell 0.5% to 23,294.51. In South Korea, the Kospi lost 1.7% to 2,305.70, while the Shanghai Composite index recovered from early losses, gaining 0.1% to 3,271.72. Australia’s S&P/ASX 200 declined 1.7% to 5,952.40.

Shares also fell in Taiwan and Southeast Asia.

The future for the S&P 500 rebounded, gaining 0.9% to 3,293.80 while the future contract for the Dow industrials added 1% to 26,668.00.

In the US, cases are increasing in just about every state and the number of deaths and hospitalizations due to COVID-19 are on the rise. Even if the most restrictive lockdowns don’t return, investors worry people will limit their spending and activities, hurting businesses. The US economy could lose momentum just as prospects for more economic support from Washington have dwindled as Tuesday’s Election Day nears.

“Many people had come to believe we were at least stable, and now we’re having a second uptick, which throws potential GDP and everything else up in the air,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab. ”I did not expect this level of volatility or this degree of a sell-off.”

Uncertainty about the upcoming presidential election has also been pushing markets around.

The S&P 500 lost 119.65 points to 3,271.03. The Dow lost 943.24 points, or 3.4%, to 26,519.95. The Nasdaq composite slumped 3.7% to 11,004.87. The se

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