Asian shares fall as fresh outbreaks overshadow vaccine progress

Asian stocks followed Wall Street’s sharp selloff on Thursday as concerns about rising coronavirus infections and new shutdowns in major U.S. cities hosed down earlier investor enthusiasm about COVID-19 vaccine developments.Bearish sentiment triggered a late-session retreat in stock markets on Wednesday after a surge in new COVID-19 infections prompted New York City, which has the largest school district in the United States, to halt in-person learning starting from Thursday.

The news of the shutdowns overshadowed Pfizer Inc's PFE.N announcement that its COVID-19 vaccine was 95% effective and that the company would apply for emergency U.S. authorization within days. Pfizer's vaccine has a similar effectiveness as the candidate developed by Moderna Inc MRNA.O.

“It’s like a seesaw, the fight between the growth of COVID and the excitement about the vaccine is really weighing on the market,” said Hilary Kramer, chief investment officer for Kramer Capital Research in New York.

Australia's S&P/ASX 200 .AXJO lost 0.5% in early trading, while Hong Kong's Hang Seng index futures .HSIHSIc1 lost 0.02%. Japan's Nikkei 225 .N225 fell 0.4%.

New York City joined other large school districts in cities like Boston, Detroit, Las Vegas, Philadelphia that have recently canceled in-person learning due to rising coronavirus cases.

Forty-one U.S. states have reported record daily increases in COVID-19 cases in November, 20 have registered record daily deaths and 26 have reported new peaks in hospitalizations, according to a Reuters tally of public health data.

Despite upbeat vaccine developments, the prospect of roll-backs of reopenings and new lockdowns weighed on market participants. All 11 major sectors in the S&P 500 closed in negative territory, with energy shares .SPNY suffering the biggest loss.

The Dow Jones Industrial Average .DJI fell 1.16%, the S&P 500 .SPX lost 1.16%, and the Nasdaq Composite .IXIC dropped 0.82%.

Richmond Federal Reserve President Thomas Barkin said allowing the Fed’s emergency lending programs to sunset on Dec. 31 could pose risks to financial markets, especially as the pandemic is escalating.

The dollar moved off earlier lows following better-than-expected U.S. housing data, with the greenback still on pace for its fifth straight decline as the Pfizer news gave investors an appetite for some risk taking.

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