Asia Reopening Stocks Slump On China Covid Wave, US Macro Worry | Old North State Wealth News
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Asia Reopening Stocks Slump on China Covid Wave, US Macro Worry



(Bloomberg) — Asian travel and retail stocks fell amid concerns on the latest wave of Covid in China as well as a possible slowdown in the US economy.

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Shares of luxury brand Prada SpA and Macau casino operator Sands China Ltd. slid as much as 6% each in Hong Kong. Cosmetics maker Shiseido Co. and Tokyo Disney operator Oriental Land Co. dropped more than 5% in Tokyo. The regional benchmark MSCI Asia Pacific Index fell as much as 0.7%, as Washington’s prolonged debt-ceiling impasse hurt sentiment.

Familiar themes resurfaced as vaccine makers climbed in the US overnight after news that China expects to see virus infections peak at about 65 million a week toward the end of June. Meanwhile, European luxury stocks erased more than $30 billion in market value amid worry on US growth.

Concerns over China’s latest coronavirus wave “triggered the selloff we see in casino and travel shares today,” said Alvin Ngan, an analyst at Zhongtai Financial International Ltd. “China’s slower-than-expected economic recovery also put a cloud over consumer sentiment on luxury spending.”

Still, Ngan remains positive on the long-term reopening story and sees the dip as a good buying opportunity for casino stocks. Share performance among stocks that benefit from tourist demand has been uneven this year, with Prada still up more than 20% while Shiseido is little changed.

Much of Japan’s recent inbound tourist traffic is from Singapore, Korea and Taiwan, as well as Westerners “taking advantage of the weak yen,” said Amir Anvarzadeh, a strategist at Asymmetric Advisors Ltd. “This correction will provide a big buying opportunity” for investors who missed earlier rallies in reopening stocks, he said.

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