Asian stocks were down on Wednesday morning, with investors inspecting the damage after U.S. markets saw a second rout in U.S. tech stocks in less than a week during the previous session.
Tuesday’s rout was triggered in part by Britain’s AstraZeneca (NYSE:AZN) pushing the pause button on trials of its COVID-19 vaccine candidate that it is developing with the University of Oxford, one of the forerunners in the race to reach the market as a cure for COVID-19. The pause, reportedly due to an adverse reaction in a trial participant in the U.K., saw the company's U.S. shares fall as much as 8.3%. But it pledged not to take shortcuts even amid the pressure to complete the trials and release the vaccine into the market as quickly as possible.
Investors are assessing whether the pullback for stocks could indicate either the true state of the market’s health, or the start of a longer, larger downturn.
“The path of least resistance for the market may well be to test the downside … ultimately, if there is more selloff, I suspect real money investors will take the opportunity to buy the dip,” Mizuho International Plc head of multi-asset strategy Peter Chatwell told Bloomberg.
Hong Kong’s Hang Seng Index was down 1.38% by 10:45 PM ET (3:45 AM GMT). The government said on Tuesday that it would further relax social distancing measures, as the city recorded six COVID-19 cases on Tuesday. The number of people allowed per table in restaurants increased from two to four, premises including mahjong parlors, most indoor and outdoor sports facilities, ice-skating rinks and museums were allowed to re-open and the public gathering limit was raised from two to four people. Talks are also underway with Australia, France, Germany, Japan, Malaysia, New Zealand, Singapore, South Korea, Switzerland, Thailand and Vietnam to form travel bubbles.
The Shanghai Composite fell 1.72% and the Shenzhen Component slid 2.58%.
Meanwhile, China’s Consumer Price Index (CPI) and Producer Price Index (PPI) for August rose 2.4% and fell 2% respectively year-on-year, with CPI rising 0.4% month-on-month, according to data released earlier in the day. Although all the readings saw drops from the previous month, they hit forecast numbers prepared by Investing.com.
In Australia, the ASX 200 slid 2.58%.
Japan’s Nikkei 225 fell 1.51% and South Korea’s KOSPI was down 0.96%. Data released earlier in the day showed an unexpected fall in unemployment, a third consecutive month of falls, despite tightened social distancing rules implemented after the number of COVID-19 cases rose in the country.
The unemployment rate for August was 3.2%, down from 4.2% in July. But the data also showed the loss of 274,000 jobs, with overall employment declining for a sixth straight month.