Type to search

Asia’s Traders Run Out of Energy as Delta Virus Fears Refuse to Fade

Hang Seng dips amid rumours Beijing is to ‘severely punish’ ride-hailing app Didi; Singapore, Bangkok and Jakarta also in the red but earnings surges bring hope 

The Shanghai Composite Index fell while the Shenzhen Composite Index on China's second exchange eased too.

• Hang Seng dips amid rumours Beijing is to ‘severely punish’ ride-hailing app Didi

• Singapore, Bangkok and Jakarta also in the red but earnings surges bring hope 


Asia’s markets wobbled again on Friday as investors struggled to keep pace with the global rally for a third day despite another batch of healthy corporate earnings, with the Delta variant continuing to cast a shadow across trading floors.

Wall Street’s three main indexes closed near new records on Thursday, fuelled by better-than-expected corporate reports and a seemingly unbreakable optimism about the long-term economic recovery – thanks to colossal government stimulus and central bank largesse.

That positive mood has managed to withstand its toughest test yet, which is in the frightening spike in new coronavirus cases around the world – even those with good vaccination rates – that has forced several governments to reimpose lockdowns or containment measures.


Also on AF: Singapore’s GIC Says China Tech Crackdown to Make Tech Industry More Sustainable


Traders were given an extra lift by a pledge from the European Central Bank that while the eurozone was bouncing back strongly, it would maintain its ultra-loose monetary policies until at least the end of March 2022, or until officials consider “that the coronavirus crisis phase is over”.

But Asian markets were more sluggish. Hong Kong and Shanghai led losses, with observers saying tech firms were distracted by a Bloomberg report that China was considering a severe punishment for ride-hailing firm Didi Cuxing as officials probe what they called “cybersecurity issues”.

The move comes just weeks after the firm listed in New York, despite pushback by Beijing.

The Hang Seng Index fell 1.45%, or 401.86 points, to 27,321.98. The benchmark Shanghai Composite Index dropped 0.68%, or 24.34 points, to 3,550.40, while the Shenzhen Composite Index on China’s second exchange slipped 1.43%, or 35.72 points, to 2,468.14.



Singapore, Manila, Bangkok and Jakarta were also in the red. Sydney, Seoul, Wellington and Mumbai were slightly higher while Taipei barely moved. Tokyo was closed for a holiday.

Still, analysts remain convinced that the latest stumble will give way to more gains for equities as more vaccines are administered, despite the Delta surge.

“One of the most under-appreciated things about the equity markets right now is just how much [company] earnings have risen, and how much analysts have had to revise their earnings estimates up,” Tracie McMillion, at Wells Fargo Investment Institute, told Bloomberg Television.



She said she was keeping tabs on the Delta spread in case it had an effect on consumer behaviour and the shift in the recovery from “great to really good”.

But market strategist Louis Navellier added that US 10-year Treasury yields were dropping as investors shifted into safer havens owing to worries about Delta.

“This means that either inflation fears are ebbing or there is a flight to quality as the Covid-19 Delta fears spread. Frankly, I believe that although energy prices are moderating, the Covid-19 Delta fear of the global economy slowing is the biggest culprit behind falling Treasury bond yields.”



Hong Kong – Hang Seng Index: DOWN 1.5% at 27,321.98 (close)
Shanghai – Composite: DOWN 0.7% at 3,550.40 (close)
Tokyo – Nikkei 225: Closed for a holiday
New York – Dow: UP 0.1% at 34,823.35 (close)


  • Reporting by AFP


Read more:

Buffett-Backed Paytm: Five Things About India’s Biggest IPO in a Decade

Frenzied Appetite for India Food Delivery Giant Zomato’s IPO


AF China Bond