HONG KONG / NEW YORK (Reuters) – Asian stocks fell on Tuesday, extending a pullback from multi-year highs last week on renewed fears that a highly contagious new strain of COVID-19 stopping much of Britain could lead to an economic recovery.
The Australian S & P / ASX 200 extended losses to 0.67%. The Japanese Nikkei 225 fell 0.85%.
MSCI’s measure of Asia-Pacific stocks outside Japan fell 0.21%. China’s benchmark CSI300 Index and Hang Seng Index both opened 0.2%.
“An escalation of European COVID-19 restrictions in response to fears surrounding a new variant, which is expected to spread more quickly, should and should, of course, trigger a negative response from prices through the short-term global growth impact,” said Stephen Innes, Chief Global Market Strategist at Axi.
Illiquid conditions will persist at the end of the year, but such dips could be an opportunity to fade earlier than anything else, he said.
Countries around the world closed their borders to Britain on Monday over fears of a new form of coronavirus, which is said to be up to 70% more transmissible than the original, causing travel chaos and increasing the prospect of food shortages days before Great Britain. Britain will start leaving the European Union.
The discovery of the new strain, just months before vaccines are expected to be widely available, renewed fears about the virus, which has killed about 1.7 million people worldwide. As a result, European stocks fell during their worst session in nearly two months on Monday.
Oil prices fell on expectations of lower demand, with US crude oil recently falling 0.33% to $ 47.81 a barrel, while Brent was down 0.2% at $ 50.81.
US equities offset many of their early losses during a volatile session on Monday, hoping that a long-awaited stimulus package agreed by congressional leaders will help drive a stronger recovery.
The S&P 500 ended the day down 0.39% to 3,694.92.
The volatility of US stocks increased during the lean holiday trading. The Cboe Volatility Index, known as Wall Street’s “anxiety meter”, recorded its biggest one-day gain since late October, even though it ended well after its session high.
Spot gold rose 0.3% to $ 1,881.7 an ounce, with the safe harbor hitting a month high earlier in the session.
Reporting by John McCrank in New York and Kane Wu in Hong Kong; Editing by Sam Holmes