Global stocks started May on the back foot after a slew of US corporate earnings undermined investor hopes that markets may have put the worst of the coronavirus pandemic behind them.
The falls on Friday could mark a turn in sentiment for investors, who have been emboldened of late by hopes of a potential treatment for Covid-19 and the ending of economic lockdowns in the US and Europe.
US stocks in April notched their biggest monthly rally since 1987.
On Friday, Japan’s benchmark Topix index fell 2.1 per cent while Australia’s S&P/ASX 200 dropped 3.7 per cent. Markets in mainland China, Hong Kong and South Korea were closed for public holidays.
Equity market positivity ebbed after US ecommerce group Amazon warned that severe coronavirus-related strain could leave operating income in the second quarter anywhere between a loss and gain of $1.5bn. That sent shares down 5 per cent in after-hours trading.
That, and technology company Apple’s decision to withhold guidance for the current quarter, has raised fresh concerns over the corporate impact of the global health crisis. Shares in Apple fell 2.5 per cent after the US market closed.
Wall Street’s S&P 500 slipped almost 1 per cent overnight after data showed that more than 3.8m Americans had filed new claims for jobless benefits in the last week, bringing the total from the start of the lockdown to more than 30m.
Futures tipped the US stock benchmark to drop 1.4 per cent when trading begins on Wall Street later in the day. The FTSE 100 was expected to fall by the same extent.
In Asia, Japanese stocks were under pressure after purchasing managers’ index data for April signalled the sharpest drop since 2009, as the pandemic spurred factory shutdowns and a collapse in demand.
“Until we’re past the peak of the Covid-19 pandemic and export demand can begin its slow recovery, a sizeable chunk of Japan’s manufacturing economy is set to remain effectively shut down,” said Joe Hayes, an economist at IHS Markit.
Oil prices added to Thursday’s gains. International benchmark Brent rose 2.2 per cent to $27.05 a barrel, while US marker West Texas Intermediate climbed 3.7 per cent to $19.54.