Are Asian markets doomed again due to new coronavirus surges in the area?
Eastern Eye Staff
After an impressive rise in global indices in recent weeks, market participants are now worried about the recent outbreak of Covid-19 infections and new mutations of the virus, particularly in India and Japan, pushing most indices down. Indian double mutation variant (named B.1.617) worries health experts, as the country faces a violent rebound in the number of cases.
India is one of the most populated countries in the world, with nearly 1.39 billion inhabitants, and the country has been hit hard by Covid-19. India has thus far recorded over 15.9 million cases (the 2nd highest figure after the US) and more than 184,000 deaths (the 4th highest in the world, after the US, Brazil and Mexico) according to the Johns Hopkins Coronavirus Resource Center. The country’s daily new infection figures are now higher than in the United States and Brazil – two of the most heavily impacted countries.
According to the BBC, “India has so far administered more than 127 million doses of a coronavirus vaccine in what is the world’s largest inoculation drive. More than 109 million people have received one dose, and over 17 million people have been fully vaccinated after receiving two doses.” Still, cases continue to surge, and shortages have affected the country’s path to vaccination.
Japan is another country in Asia where the Coronavirus continues to spread. At the time of writing, Japan is considering tougher measures in big cities, as mutant strains of Covid-19 are triggering new cases and outbreaks. The country might even soon declare a state of emergency in Tokyo and other regions, with cases spiking over the last 3 weeks.
Olympic organizers may also need to cancel the Tokyo Olympics, which are supposed to be held in just over 3 months, even though Seiko Hashimoto, Tokyo 2020 President, recently declared on behalf of the organizing committee that “We’re not thinking of cancelling the Olympics. We will continue to do what we can to implement a thorough safety regimen that will make people feel complete safety.”
These concerns over Coronavirus could affect the rise of Asian (and global) equity markets, as it threatens prospects for economic recovery. This uncertainty will likely trigger higher volatility and strong index price movements in the main Asian index in the coming days, which is likely to trigger interest amongst traders focusing on index trading on platforms like Easymarkets. Yet, traders must be careful in the face of so many unpredictable events and protect their capital with risk and money management techniques.
Indices are not the only asset class to be affected by rising concerns about the world-wide Covid-19 situation. In an article recently published on Reuters, analysts at Commonwealth Bank of Australia explained on a research note: “Renewed concerns about the global economic recovery weighed on commodity prices and commodity currencies. Many countries around the world, such as India and Brazil, set new records for infections and deaths. As long as the virus persists, there is a risk virus mutant develop and spread to other countries.”