Asian Shares Hit TwoWeek Lows, Dollar Gains as Investors Scurry for Sover


Asian shares skidded to a twoweek trough on Wednesday and the dollar neared fourmonth highs as coronavirus lockdowns in Europe and potential U.S. tax hikes hit risk appetite, leading to a flight to safety.

U.S. and European stock futures were weaker in late Asian trading. EMini futures for the SP 500 were down 0.1, Londons FTSE futures were 0.65 lower while eurostoxx 50 futures lost 0.6.

MSCIs broadest index of AsiaPacific shares outside of Japan fell 1.3 after losing 0.9 on Tuesday. It went as low as 674.18 points, a level last seen on March 9.

The index has had a disappointing run in March after five straight months of gains, as risk assets were earlier spooked by fears inflation will pick up at a fasterthanexpected pace led by successful coronavirus vaccine rollouts and massive U.S. fiscal stimulus.

Japans Nikkei stumbled 2 while South Koreas KOSPI slipped 0.4. Chinese shares were in the red for a second day with the bluechip CSI300 index down 1.65. Hong Kongs Hang Seng skidded 2.2.

On Wall Street overnight, the Dow Jones Industrial Average fell 0.94, the SP 500 lost 0.76 and the Nasdaq Composite dropped 1.12.

We continue to stress that the economic outlook remains tied to the path of the virus, said Kim Mundy, senior economist currency strategist at Commonwealth Bank.

The risk is that the more contagious and deadly strain of the virus elicits a stronger response from European governments which sees Europe remaining locked down for longer.

Germany extended…

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