An acceleration in Covid-19 infection rates overwhelmed positive sentiment in Friday night trading. Major US stock indices fell by around 2.5% as the global number of virus infections topped 10 million, with 500,000 reported fatalities. The reversal of lockdown easing in Texas, Florida and Arizona provided the trigger for the sell-off, but rapidly spreading infection in countries like Brazil and India could ultimately pose a larger threat.

The US dollar and Japanese yen are well supported this morning as investors seek safety. US stock futures fell further at today’s re-opening, increasing the likelihood off a torrid Asia Pacific trading day. Crude oil prices are lower, and gold is holding above the 7 year break-out level, in further signs of the prevailing risk-off sentiment.

Data released over the weekend showed industrial profits in China rose for first time this year. The positive news may moderate regional concerns. Retail sales in Japan, due this morning, may also boost sentiment if the May numbers reflect the forecast lift of 3%. Hong Kong trade data is expected to indicate declines of 4% to 8% in both imports and exports last month.

The Australian share market faces further pressure as real estate investment trusts and important infrastructure stock such as APA Group and Transurban trade ex-dividend. F&P Healthcare reported a 37% lift in profits for its full year, boosted by Covid-19 demand for its respiratory devices. The numbers are ahead of analysts’ forecasts, and the dual listed stock may provide a rare bright spot in trading today.

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