Major indexes in the region did manage to stave off heavy losses, though. Japan’s Nikkei 225 ( ended the day down 0.8%, significantly better than an earlier drop of as much as 3.1%. )
South Korea’s Kospi (was last lower by 1.9%, also better than earlier. Hong Kong’s )Hang Seng ( lost 1.2%, while China’s )Shanghai Composite ( was flat. )
Asia’s resilience can largely be attributed to a positive showing in US premarkets overnight, according to Jeffrey Halley, senior market analyst for Asia Pacific at Oanda. Dow ( futures were last up more than 400 points, or 1.6%. )S&P 500 ( futures increased 1.4%, while )Nasdaq ( futures were up 1.3%. All three major indexes on Thursday )recorded their worst performances since March.
“All eyes will be on the US this evening and whether the correction continues or is forgotten as quickly as it began,” Halley wrote in a Friday research note. “A sensible case can be constructed for either outcome and a wait and see strategy is the best one.”
The pandemic already has caused unemployment to soar in the United States as parts of the economy shut down. A second wave of infections could force many businesses to close again after just having reopened.
“The fear of a rising rate of Covid-19 infections is the most important driver in our view for this sell-off,” wrote Tai Hui, chief Asia market strategist for JP Morgan Asset Management, in a research note published Friday.
Oil markets were also lower during Asian trading hours Friday — likely a response to fears about the uptick in infections in the world’s largest oil consuming economy, according to Stephen Innes, chief global markets strategist at AxiCorp.
US oil briefly sank more than 5% early in the Asia day, though futures recovered and were last trading down 2.4% at $35.47 per barrel. Brent, the global benchmark, dropped 2.4% to $37.62 per barrel, extending Thursday’s steep declines.
— Anneken Tappe and Tami Luhby contributed to this report.