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Asia Pacific Stocks Lower as Coronavirus Concerns Linger

Stocks in Asia Pacific declined in Thursday afternoon trade as investors continue to weigh the implications of a recent uptick in coronavirus cases.

In Japan, the Nikkei 225 dipped 0.41% in morning trade while the Topix index declined 0.27%. South Korea’s Kospi also slipped 0.29%.

Hong Kong’s Hang Seng index shed 0.22% by the afternoon. Shares of Chinese e-commerce giant jumped in their Thursday Hong Kong debut, rising more than 3% as compared to the issue price.

Mainland Chinese stocks nudged higher by the afternoon, with the Shanghai composite hovering above the flatline while the Shenzhen component added 0.321%.

Over in Australia, the S&P/ASX 200 fell 0.81%. Australia’s unemployment in May rose to 7.1% from a revised 6.4% in April, according to a Thursday release by the country’s Bureau of Statistics. That was the highest since October 2001, according to Reuters.

Overall, the MSCI Asia ex-Japan index dipped 0.2%.

Investor reaction to a recent surge in Covid-19 cases stateside will be watched on Thursday, with the number of coronavirus hospitalizations across Texas surging about 11% in a single day on Wednesday. A coronavirus model once cited by the White House also now projects projects more than 200,000 Americans could die of Covid-19 by Oct. 1.

Over in China, a recent jump in infections in Beijing led the city to cancel flights, close schools as well as block off some neighborhoods, according to Reuters.

“It is unclear how markets should react given the obvious high bar to re-impose restrictions in the US and states across the US are continuing to re-open their economies. High-frequency mobility indicators continue to point towards a pick-up in activity across in the US and including Texas,” Tapas Strickland, director of economics at National Australia Bank, wrote in a note.

Contrasting it against the situation in China, Strickland said authorities in the country are “taking aggressive action” though the approach toward containing the virus’ spread has been “more targeted” as compared to lock-down measures that were imposed in Wuhan — where the disease was first reported — earlier this year.

Overnight on Wall Street, the Dow Jones Industrial Average and S&P 500 fell for the first time in four sessions.

U.S. Federal Reserve Chairman Jerome Powell said Wednesday that the central bank will move away from corporate bond ETFs in favor of direct corporate-bond purchases. It’s a better tool for supporting liquidity and market functioning,” he said. On Tuesday, Powell had warned of “significant uncertainty” about the economic recovery.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.012 after rising from levels around 96.5 seen earlier in the trading week.

The Japanese yen traded at 106.86 per dollar, stronger than levels above 107.2 seen yesterday. The Australian dollar changed hands at $0.6869, off highs above $0.693 seen earlier this week.

Oil prices declined in the afternoon of Asian trading hours on Thursday, with international benchmark Brent crude futures down 0.96% to $40.32 per barrel. U.S. crude futures fell 1.45% to $37.41 per barrel.