Asian markets weighed by virus spikes and stimulus gridlock

Most Asian markets fell Monday following another disappointing performance on Wall Street with investors growing concerned about an uptick in coronavirus infections in Europe and the United States, as well as the lack of movement in Washington on a new stimulus.

After months of big gains around the world, fuelled by government stimulus and central bank largesse, equities are beginning to wobble, with analysts warning traders were taking profits as they consider the rally may have been overblown.

A key worry is a spike in new virus cases in key economies that have led to containment measures being reimposed.

Sensitive to uncertainty

Hong Kong led losses, dropping 1.5 percent with market heavyweight HSBC tumbling around four percent to a 25-year low on fears it could be added to a Chinese list of firms deemed a threat to national security and following news it had been accused of allowing fraudulent activity to go unpunished.

Shanghai, Sydney, Seoul, Taipei, Wellington and Jakarta were also well down, with smaller losses in Singapore, though Manila, Mumbai and Bangkok were marginally higher. 

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London, Paris and Frankfurt all fell in the first few minutes.

Investors are keeping an eye on Capitol Hill where US lawmakers are still nowhere near agreeing on a new rescue package for the beleaguered economy, despite millions of Americans struggling to make ends meet.

Federal Reserve boss Jerome Powell has warned that while the central bank can keep interest rates low and provide financial support to businesses, the economy needs a new shot in the arm from Congress to get its recovery back on track.

Traders will be closely watching congressional testimony by Powell later in the week for fresh clues about the Fed's future policy plans.

Agence France-Presse