Global Shares Skid on VIrus Fears

TOKYO (AP) -- Global shares sank Monday and U.S. futures also slipped as a resurgence of coronavirus cases in China and other countries deepened pessimism over prospects for a global economic recovery.

Benchmarks fell in Paris, London, Tokyo and Shanghai after China reported new local infections in Beijing and reimposed precautions to prevent it from spreading.

Stocks are turning wobbly as investors re-evaluate their expectations for economic growth, which many skeptics have been saying were overly optimistic.

Case numbers are still growing in various nations, including emerging economies, and without a vaccine, relaxing lockdowns and reopening travel could bring on further waves of COVID-19 cases.

France's CAC 40 slipped 1.8% in early trading to 4,750.96, while Germany's DAX dove 1.9% to 11,720.92. Britain's FTSE 100 slid 1.3% to 6,023.99. U.S. shares were set for declines, with Dow futures dropping 2.7% to 24,720.50. S&P 500 futures shed 2.2% to 2,957.88.

Earlier in Asia, Japan's benchmark Nikkei 225 dropped 3.5% to finish at 21,530.95. South Korea's Kospi slipped 4.8% to 2,030.82. Australia's S&P/ASX 200 shed 2.2% to 5,719.80. Hong Kong's Hang Seng slid 2.2% to 23,776.95, while the Shanghai Composite edged down 1.0% to 2,890.03.

Shares also fell in India, Taiwan and Southeast Asia.

“Once again, the pandemic has triggered cause for fear and doubt about the road ahead,” Hayaki Narita at Mizuho Bank said in a commentary.

Rising COVID-19 cases in Latin American and parts of Asia, re-emerging “second wave” risks in parts of the U.S., South Korea and China and so-called “cluster” cases in Japan were adding to worries, he said.

Tokyo reported 48 newly confirmed cases on Monday, the highest since the government “emergency” for the virus outbreak was called off last month, according to Kyodo News, citing unidentified sources familiar with the records.

China reported 49 new confirmed coronavirus cases on Monday, 36 of them in Beijing, as the capital re-instituted measures to contain a new outbreak. Authorities were testing tens of thousands of people after dozens of cases were traced to a wholesale market that supplies much of the city’s meat and vegetables.

India's public health authorities reported more than 11,000 new cases.

Rolling waves of outbreaks, if left unchecked, could result in more shutdowns to fight the pandemic, or at the very least will undermine consumer and business spending, hindering a global recovery.

“If globally, we are still in wave 1, then it is possible that without a vaccine, the big-wave is still lying out there somewhere waiting to hit,” said Robert Carnell, regional head of research Asia-Pacific at ING.

Still, economists have noted promising signs that the global downturn brought on by the coronavirus pandemic might be bottoming out.

China’s industrial production accelerated in May, suggesting the world’s second-largest economy is gradually recovering from earlier shutdowns to fight the coronavirus.

Factory output rose 4.4% over a year earlier, up 0.5 percentage points from April’s rate, the National Bureau of Statistics reported Monday.

But RaboResearch said in a commentary the latest China data had "mostly disappointed.”

“In short, even with a ‘build it and they will come’ attitude, and even with the virus ‘having been beaten,’ it still looks like China’s Q2 GDP will be negative,” it said.

Benchmark U.S. crude oil lost $1.35 to $34.91 a barrel in electronic trading on the New York Mercantile Exchange. It fell 8 cents to settle at $36.26 a barrel Friday. Brent crude oil, the international standard, fell 96 cents to $37.78 a barrel.

The dollar inched up to 107.39 Japanese yen from 107.37 yen. The euro was flat at $1.1258.