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Market Opening: Global Stock Fall

Market Opening: Global Stock Fall

Stocks fell as the worldwide death toll from coronavirus topped 500,000 and US officials warned that the window to halt the pandemic’s spread across America was closing.

Japan’s benchmark Topix index fell 1.8 and Australia’s S&P/ASX 200 shed 2.2 per cent on Monday while South Korea’s Kospi slipped 2 per cent. Hong Kong’s Hang Seng was down 1.6 per cent and China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks shed 0.9 per cent.

Futures markets tipped Wall Street’s S&P 500 to fall 0.3 per cent when trading begins later on Monday. London’s FTSE 100 was set to slip 1 per cent.

Those declines came after Alex Azar, US health and human services secretary, said on Sunday that Covid-19 cases were “surging” in the southern US where several states ended lockdowns early. He accused the Trump administration of being “in denial about the problem”.

The US has now confirmed 2.5m cases and more than 125,000 deaths from the disease — a quarter of the 10m infections and half a million global fatalities.

Some investors are concerned that a recent rally in stocks based on hopes of a strong economic rebound following the pandemic may have gone too far.

“Equities were getting ahead of economic fundamentals,” said Tai Hui, chief Asia market strategist at JPMorgan Asset Management.

He said the jump in US infections “could also prompt concerns in Europe, as European governments are considering further opening up of borders during the summer holiday season”.

The S&P 500 closed 2.4 per cent lower on Friday after the US Federal Reserve announced it would limit share buybacks and dividends by America’s biggest banks and as Texas and Florida rolled back reopening measures, stoking fears that a nascent economic recovery could be derailed.

Crude fell after Chesapeake Energy, a pioneer of the US shale revolution, declared bankruptcy following an oil price crash that has ravaged producers. Analysts said the company’s Chapter 11 filing could prompt others in the shale sector to follow suit.

Brent crude, the international benchmark, fell 2 per cent to $40.19 a barrel while US marker West Texas Intermediate dropped 2.1 per cent to $37.68.

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