Asia-Pacific Stocks Tumble; Australian Shares Fall to 2-Week Low, Japan Reports Dismal Retail Sales

The major Asia-Pacific stock indexes finished lower on Monday amid a growing number of global coronavirus cases. Investors reacted to new reports showing a spike in COVID-19 cases in the United States, Australia and China on concerns that the surge in cases could curtail the reopening of economies and lead to renewed restrictions and lockdowns.

In Japan, the Nikkei 225 Index settled at 21995.04, down 517.04 or -2.30%. Hong Kong’s Hang Seng Index closed at 24301.28, down 248.71 or -1.01% and South Korea’s KOSPI Index finished at 2093.48, down 41.17 or -1.93%.

In Australia, the S&P/ASX 200 Index settled at 5815.00, down 89.10 or -1.51% and China’s Shanghai Index finished at 2961.52, down 18.03 or -0.61%.

Coronavirus Update

Globally, more than 500,000 lives have been taken by the coronavirus as the number of infections crosses 10 million, according to data compiled by Johns Hopkins University. In the U.S., coronavirus cases recently surged by more than 45,000 in a day. The recent spike in cases stateside has led some states such as Texas and Florida to re-close some businesses.

Japan’s Retail Sales Extend Slump as Coronavirus Curbs Keep Shoppers Away

Retail sales in Japan tumbled at a double-digit pace for the second straight month in May as the coronavirus pandemic and lockdown measures delivered a heavy blow to consumer confidence and economic recovery prospects, Reuters reported.

Retail sales fell 12.3% in May from a year earlier. The decline followed a 13.9% drop in April, which was the biggest fall since March 1998, and was worse than an 11.6% fall forecast by economists in a Reuters poll.

Australian Shares Hit 2-Week Low as Virus Surge Weighs

Australian shares kicked off the week on a lackluster note to close 1.5% lower on Monday, with financials and energy stocks leading the declines, as a global upsurge in COVID-19 infections sent traders towards a risk-off mode, Reuters reported.

Weighing the most on the benchmark was the 1.6% drop in financial stocks as the “Big Four” banks lost between 1.5% and 2.5%.

Australia’s energy sub-index dropped up to 3.9% to its lowest in more than a month as oil prices slid for a second straight session.

A sub-index of miners also dragged the index lower, pressured by a dip in iron ore prices. Bucking the trend, gold stocks gained 0.9%, helped by a rise in bullion as investors opted for safe-haven assets.

China to Impose Visa Restrictions on US Individuals over Hong Kong

Beijing said on Monday it will impose visa restrictions on U.S. individuals with “egregious conduct” on Hong Kong-related issues, mirroring U.S. sanctions against unnamed Chinese officials deemed responsible for curbing freedoms in the city.

The announcement comes as the top decision-making body of China’s parliament deliberates a draft national security law for Hong Kong that pro-democracy activists in the city fear will be used to eliminate dissent and tighten Beijing’s control.

“The U.S. is attempting to obstruct China’s legislation for safeguarding national security in the HK SAR (Hong Kong Special Administrative Region) by imposing the so-called sanctions, but it will never succeed,” he told reporters.

“In response…China has decided to impose visa restrictions on U.S. individuals with egregious conduct on HK related issues.”