Asia-Pacific stocks tracked global peers lower as concerns about the economic fallout from the new more infectious coronavirus strain sweeping the UK unsettled markets.
Japan’s Topix dropped 1.6 per cent on Tuesday while Australia’s S&P/ASX 200 lost 1.1 per cent and South Korea’s Kospi shed 1.6 per cent. In China, the CSI 300 index of Shanghai- and Shenzhen-listed stocks moved down 1.4 per cent.
The weakness in Asia followed a wave of negative sentiment in global markets, with investors worrying that the more virulent Covid-19 strain could lead to further lockdowns and curb global travel. The FTSE All World index had its worst day in three weeks on Monday, losing 0.8 per cent.
In US markets, renewed fears over the infectiousness of the pandemic were partly offset after the Senate passed a $900bn fiscal stimulus package. On Wall Street, the S&P 500 fell as much as 2 per cent but recovered much of those losses to close down 0.4 per cent.
In Europe, where a host of countries have banned travel with the UK and France has limited freight transport across the British Channel, the Stoxx 600 fell 2.3 per cent on Monday.
Hong Kong’s Hang Seng index initially rose on Tuesday morning but soon followed other Asian markets lower, dropping 1.1 per cent a day after the city banned incoming flights from the UK in response to the new strain.
Trading in oil markets was negative again a day after the biggest fall for Brent crude in over a month. The international benchmark lost 2.2 per cent to $49.79 a barrel on Tuesday in Asia.
The UK pound continued to weaken, weighed down by the government’s strict new lockdown measures over Christmas and deadlocked talks over a Brexit trade agreement with the EU.
Sterling slid another 0.4 per cent to $1.3411 in Asian trading, while the dollar index rose 0.2 per cent.
In commodities, gold was down 0.1 per cent at $1,874.46 an ounce.