Asian markets suffer losses due to a surge in coronavirus cases, Hong Kong

Hong Kong, Jan 28 (AFP/APP): Asian markets suffered further losses on Thursday, tracking a route in New York and Europe as markets were hit by a perfect storm of worries about the slow roll-out of vaccines, surging infections, a stuttering economic recovery, and high valuations.

After a months-long rally sent several indexes to records or all-time highs, investors have started to fret in recent weeks about a possible correction and analysts say some losses are to be expected.

The Federal Reserve added to the sense of concern as it warned that the economy was struggling in the face of a new wave of COVID-19 infections that is hammering the northern hemisphere and forcing governments to reimpose strict containment measures.

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The US central bank said the “pace of the recovery in economic activity and employment has moderated in recent months” and said it would maintain its ultra-loose monetary policy for the foreseeable future.

Chair Jerome Powell added that “overall economic activity remains below its level before the pandemic, and the path ahead remains highly uncertain”.

While there were few surprises from the meeting and Powell’s comments, they provided a dose of reality to investors about the state of the economy, despite broad long-term optimism.

OANDA’s Jeffrey Halley said: “It seems that the market was looking for something more concrete. Disappointed inflationistas headed for the exit to lick their wounds, although frankly, they should have expected nothing less from the Fed.”

Worries about inoculations are rife, with the US and Europe struggling to get their programmes into gear owing to supply problems.

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