Latest News Update: Fears of Coronavirus Push Asia Pacific Stocks Lower
Virus fears dragged Asia Pacific shares down
Stocks in the Asia-Pacific region fell on Friday as investors reacted to news of a new type of coronavirus outbreak with “alarming” surges in South Africa.
The biggest declines were in Japan, with the Nikkei 225 index down as much as 2.4 percent and the broader Topix losing 1.8 percent. Japanese stocks were also affected by a 0.3 percent month-on-month increase in Tokyo’s core CPI, which, while still small compared to high inflation in other parts of the world, was the city’s largest increase since August last year.
The stock market declines reflected global concerns about a new type of coronavirus discovered in South Africa, which Somya Swaminathan, chief scientist at the World Health Organization, said has “a number of worrying mutations in the spike protein”.
Fears of further monetary tightening in the US also abounded, after a gauge of inflation closely followed by the Federal Reserve posted its biggest year-on-year jump in October since the 1990s. The minutes of the bank’s November meeting on Wednesday also revealed that some committee members called on the central bank to speed up tightening.
The news pushed Hong Kong’s Hang Seng Index down 2 per cent, Australia’s S&P/ASX 200 index down 1.4 per cent and South Korea’s Kospi down 1 per cent. China’s CSI 300 Index also lost more than 0.6 percent.
UMC pays Micron undisclosed fee to solve trade secret theft case
Taiwanese chip maker United Microelectronics Corporation will pay US conglomerate Micron Technology an undisclosed fee to settle a legal dispute between the two companies that has upended US-China tensions.
UMC was fined $60 million in October last year after pleading guilty to US charges of stealing trade secrets and sharing them with China-based Fujian Jinhua during a collaboration with the Chinese company.
The case has drawn attention to Taiwanese technology companies, which are essential to the global supply of semiconductors and tools, but also rely heavily on China. Companies have been pushed to separate themselves from China during the heightened trade tensions between the world’s two largest economies that began under the presidency of Donald Trump.
The feud began in 2016, when UMC signed a deal with Fujian Jinhua, part of which included provisions for the Taiwanese company to help it increase production capacity. In October last year, UMC admitted to US courts that it had hired Micron engineers in 2015 who later worked on the project and shared classified information from Micron with the Chinese group.
In a joint statement issued on Friday, the two companies said paying an undisclosed fee from UMC would cause both sides to withdraw their legal complaints against each other.
Australian shares drop after US holiday
Shares in Australia and futures in Japan and Hong Kong fell on Friday morning, with Asia-Pacific markets beginning to weaken today after a quiet Thanksgiving holiday in the US.
Australia’s S&P/ASX 200 Index is down 0.4 percent in early trade, while Japan’s Topix Index futures and Hong Kong’s Hang Seng Index are down 0.1 and 0.3 percent, respectively.
Markets in the US are closed for Thanksgiving on Thursday and will have a shortened session on Friday. In Europe, the Stoxx Europe 600 Index closed 0.4 percent higher as traders increased the possibility of monetary policy tightening after strong US economic data released during the previous session and the minutes of the Federal Reserve’s latest policy meeting.
Data released on Wednesday showed that weekly jobless claims in the United States reached their lowest level since 1969 and that a gauge of inflation closely followed by the Federal Reserve posted the biggest year-on-year jump in October since the 1990s.
The Australian dollar fell overnight.
UK and France clash over response to canal migrant tragedy
Boris Johnson and Emmanuel Macron were struggling Thursday to coordinate a coherent response to the deaths of 27 migrants who drowned while trying to cross the English Channel from France the day before.
The British and French governments, blaming the deterioration of relations since Brexit, blamed human traffickers’ criminal networks for the tragedy and vowed to crack down on gangs where would-be asylum seekers risked their lives in small boats.
“We need stronger European cooperation in this regard, given that France is a transit country,” the French president said during a visit to Croatia.
On Thursday, 62 more migrants arrived in the UK in small boats, while France stopped another 30.
Tensions between the UK and France continued yesterday with Priti Patel, the British Home Secretary, saying the onus was on the French government to prevent people from crossing the canal. “I have offered to work with France to put the officers on the ground and do whatever is necessary to secure the area so that people in danger do not risk their lives by boarding unseaworthy boats,” she told the Council of the Commons.
Read more about Johnson and Macron.
South African countries put on UK travel red list on Covid variant
The United Kingdom will return six South African countries to its red list of travel restrictions, after the apparent rise in cases of the highly mutated coronavirus sparked concern among global health officials.
Government officials said travelers returning from South Africa, Botswana, Namibia, Zimbabwe, Lesotho and Eswatini will have to quarantine for 10 days at a government facility from midday Friday.
Direct flights from the six countries will be banned from midday on Friday until the hotel quarantine runs from 4am on Sunday.
The rule change follows growing concern by scientists about the ability of the B.1.1.529 Sars-Cov-2 variant to evade vaccines and transmit faster than the delta variant. The strain, which was first identified in Botswana, is believed to have been behind the resurgence of Covid cases in South Africa over the past week.
Read more about the new alternative.
What are you watching in Asia today
Chinese technology profits: Meituan food delivery company and short video platform Pinduoduo report today. Mituan had to swallow a 3.4 billion renminbi ($530 million) fine after being found guilty of monopolistic practices in October. Despite the hefty fine, some analysts say the company has slipped slightly.
markets: US stock markets were closed Thursday for Thanksgiving. Australian shares fell in early trade, while futures in Japan were flat.
dataMarkets may be affected by the Australian retail sales figures for October and the inflation figures in Tokyo, it was reported today. Retail sales rose for the first time since May in September, and are expected to accelerate in October. ANZ also released today its Consumer Confidence figures for New Zealand.