Asia markets fall again as virus fears hit confidence

Asian markets extended their losses yesterday with virus and vaccine fears returning to haunt investors as Europe faces fresh infection spikes and lockdowns that could knock the economic recovery off course.

After several weeks of worrying that an expected resurgence in global growth will fan inflation and force central banks to hike interest rates, the fear of another Covid-19 wave has returned.

Europe's two biggest economies, Germany and France, as well as a number of other countries have been forced to impose new restrictions to battle the disease while struggling to get their vaccination programmes rolling properly.

"Covid-19 cases continue to resurge in continental Europe, so their double-dip recession persists as they continue to argue about vaccinations and why they are lagging behind the US and Britain in vaccination rates," said market strategist Louis Navellier.

Hong Kong was among the biggest losers, dropping two percent after news that the government had suspended its Pfizer/BioNTech vaccine programme over concerns about packaging, dealing a blow to the city's already slow inoculation programme. Hong Kong's Hang Seng Index has now fallen into a correction having lost more that 10 per cent from its recent high.

Airlines and property firms tumbled as they stand to lose most from a delay to the city's economic recovery.

Fosun Pharmaceutical, the Chinese firm distributing the BioNTech shot in China, slipped nearly five per cent.

Tokyo also shed two per cent while Shanghai, Mumbai and Jakarta each lost more than one percent, with Seoul, Singapore, Taipei, Bangkok and Wellington also well in the red.

Sydney and Manila rose, however.London, Paris and Frankfurt all fell at the open.

"Concerns regarding the strength of the post-pandemic recovery with cases remaining elevated in many jurisdictions and fresh mobility restrictions continue to rock the boat," said Axi strategist Stephen Innes.

"The pattern, in general, has been for the markets to pare back on initial lockdown announcements but then to recover, though there are worries at the moment about a lagged rise in US Covid cases to follow Europe's."