By Gina Lee
Investing.com – Asia Pacific stocks were mostly down on Wednesday morning, with optimism over a quick global economic recovery from COVID-19 weighed down by continued virus concerns.
Japan’s Nikkei 225 was down 0.59% by 10:1 PM ET (3:11 AM GMT) and South Korea’s KOSPI fell 1.03%
In Australia, the ASX 200 was down 0.45%. The country is set to end a snap five-day lockdown in Victoria state after no new COVID-19 cases were reported in a cluster linked to a quarantine hotel in the city of Melbourne.
Hong Kong’s Hang Seng Index edged up 0.10%. Strict social distancing measures will be relaxed from Thursday, including the extension of restaurant hours, doubling the number of people allowed to sit at a table and re-opening certain venues. A panel has also recommended the approval of Sinovac's (NASDAQ:SVA) Coronavac COVID-19 vaccine, with the city’s Secretary for Food and Health Sophia Chan due to make a final decision.
Chinese markets remain closed for a holiday.
Wednesday's drop comes after stocks saw gains on the first trading day in the year of the ox the day before. U.S. counterparts saw a mixed finish overnight after returning from a holiday. Stocks’ gains came over continued expectations of massive fiscal and monetary stimulus.
However, some investors expressed concerns over rising interest rates weighing in on some sectors.
The fiscal and monetary stimulus expectations contributed to a steepening yield curve for Treasuries, with the ten-year U.S. Treasury yield on Tuesday rose above 1.3% for the first time since COVID-19 took a global hold in February 2020.
“U.S. markets started the week in an optimist mode after being closed for Presidents Day on Monday … as inflation expectations rise, investors are looking to reduce their exposure to fixed income in favor of investments which will rise with any wave of inflation,” ANZ analysts said in a note.
An unprecedented cold snap in Texas has shut down around a fifth of U.S. oil production, with prices climbing to 13-month highs and stoking inflation.
The Federal Reserve will release the minutes from January's Federal Open Market Committee meeting later in the day, alongside U.S. retail sales figures. Investors will be looking through both the minutes and the figures to gauge the state of the U.S. economic recovery from COVID-19.
Meanwhile, the U.S. continues to ramp up its rollout of COVID-19 vaccines, as numbers of COVID-19 cases see a fall in both the U.S. and other regions. Debate also continues for a $1.9 trillion stimulus package proposed by U.S. President Joe Biden earlier in the year.