The rally in global stocks lost momentum in Asia as the passage of a $2tn coronavirus relief package in the US failed to offset growing concerns over a possible lockdown in Tokyo.
Japan’s benchmark Topix index fell 1.2 per cent on Thursday, a day after the country’s capital reported a record jump in new infections.
China’s CSI 300 of Shanghai- and Shenzhen-listed shares fell 0.2 per cent, while Hong Kong’s Hang Seng was flat.
The losses for Japanese stocks came as stores shelves in the capital were stripped by residents hoarding goods, a day after Yuriko Koike, Tokyo’s governor, called on inhabitants to stay home over the coming weekend.
The stumble for equities also came despite the US Senate late on Wednesday passing a stimulus bill that would provide support to taxpayers and businesses hit by coronavirus.
Investors are concerned that the support package — which needs approval from the House — could face further obstacles.
“The main concern now is around implementation — cash needs to flow rapidly to where it’s most needed,” said Anna Stupnytska, head of global macro and investment strategy at Fidelity International.
“Bureaucratic and distribution obstacles could slow this process down by weeks or even months — a delay the US economy cannot afford,” she added. “Any hold-up could result in a longer and, possibly, deeper recession, extending into the second half of the year.”
On Wednesday Wall Street recorded its first back-to-back daily gains in more than a month. Futures markets pointed to a fall of 0.6 per cent for the S&P 500 later in the day.
Investors are looking ahead to US employment data, which analysts expect will show a sharp rise in jobless claims to 1.6m in the week to March 21.
“Widespread hopes for a V-shaped recovery from the impending recession will probably be dashed,” said Charles Dumas, chief economist at TS Lombard, who thinks the US unemployment rate will rise to more than 10 per cent — or about 12m people — in April.
Total confirmed cases of coronavirus have climbed to nearly 460,000 globally, with deaths surpassing 21,000. On Tuesday, the total number of infections rose by a record of nearly 50,000, as cases in New York surged.
Among the stocks hit on Thursday was Japan’s SoftBank, which dropped 8.7 per cent after rating agency Moody’s downgraded the technology group’s debt deeper into junk territory.
Haven assets gained amid jittery markets. The 10-year US Treasury yield fell 0.08 percentage points to 0.792 per cent.