GLOBAL MARKETS-Asian stocks slip as new COVID-19 strain darkens recovery prospects

  • Reuters
  • Stock Market News
GLOBAL MARKETS-Asian stocks slip as new COVID-19 strain darkens recovery prospects
Credit: © Reuters.

By Kane Wu and John McCrank

HONG KONG/NEW YORK, Dec 22 (Reuters) - Asian shares slipped on Tuesday, extending a pullback from multi-year highs hit last week on renewed fears a highly infectious new strain of COVID-19 that shut down much of Britain could lead to a slower global economic recovery.

Australian S&P/ASX 200 .AXJO widened losses to be down 0.67%. Japan's Nikkei 225 .N225 slipped 0.85%.

MSCI's gauge of Asia Pacific stocks outside Japan .MIAPJ0000PUS fell 0.21%. China's benchmark CSI300 Index .CSI300 and Hang Seng Index .HSI both opened down 0.2%.

"An escalation of European COVID-19 restrictions in response to fears around a new variant, which is supposed to be faster spreading, should, and did, of course, elicit a negative reaction from prices via the near-term global growth impact," said Stephen Innes, Chief Global Market Strategist at Axi.

"Illiquid conditions will persist through year-end, but dips like this could present more of an opportunity to fade than anything else," he said.

Countries across the globe shut their borders to Britain on Monday due to fears about a new strain of coronavirus, said to be up to 70% more transmissible than the original, causing travel chaos and raising the prospect of food shortages days before Britain is set to leave the European Union. discovery of the new strain, just months before vaccines are expected to be widely available, renewed fears about the virus, which killed about 1.7 million people worldwide. As a result European shares fell on Monday in their worst session in almost two months. prices dropped on expectations of lower demand, with U.S. crude CLc1 recently down 0.33% at $47.81 per barrel, while Brent LCOc1 was 0.2% lower at $50.81.

U.S. stocks pared much of their early losses during a volatile session on Monday on hopes a long-anticipated stimulus package agreed to by congressional leaders will help spur a stronger recovery.

The S&P 500 .SPX ended the day down 0.39% at 3,694.92.

Volatility in U.S. equities jumped in thin holiday trading. The Cboe Volatility Index .VIX , known as Wall Street's "fear gauge," notched its largest one-day gain since late October, even though it finished well off its session high.

Spot gold XAU= rose 0.3% to $1,881.7 per ounce, with the safe-haven asset hitting a one-month high earlier in the session.

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