By Kane Wu
HONG KONG, Dec 22 (Reuters) - Asian shares widened losses on Tuesday, extending a pullback from multi-year highs hit last week on fears a highly infectious new strain of COVID-19 that hit Britain could lead to a slower global economic recovery.
Sentiment continue to sour with FTSE futures FFIc1 down 0.14% and E-mini futures for the S&P 500 index ESc1 off 0.29%, even as the U.S. Congress on Monday approved a long-awaited $892 billion coronavirus aid package. S&P/ASX 200 .AXJO was 1.21% lower. Japan's Nikkei 225 .N225 was down 0.77% in the afternoon session, touching its lowest levels in two weeks, as investors took profit from stellar gains over the past couple of months. selling is probably not going to find much resistance. The clients I speak to are more inclined to be locking in some gains than piling in more money," said John Milroy, investment advisor at Ord Minnett, a Sydney-based stock broker.
MSCI's gauge of Asia Pacific stocks outside Japan .MIAPJ0000PUS fell 0.75%. Hang Seng Index .HSI further slipped 0.63% and China's benchmark CSI300 Index .CSI300 declined 0.35%.
"An escalation of European COVID-19 restrictions in response to fears around a new variant, which is supposed to be faster spreading, should, and did, of course, elicit a negative reaction from prices via the near-term global growth impact," said Stephen Innes, Chief Global Market Strategist at Axi.
"Illiquid conditions will persist through year-end, but dips like this could present more of an opportunity to fade than anything else," he said.
Countries across the globe shut their borders to Britain on Monday due to fears about a new strain of coronavirus, said to be up to 70% more transmissible than the original, causing travel chaos and raising the prospect of food shortages days before Britain is set to leave the European Union. discovery of the new strain, just months before vaccines are expected to be widely available, renewed fears about the virus, which killed about 1.7 million people worldwide. As a result European shares fell on Monday in their worst session in almost two months. GBP= fell as much as 2.5% to $1.3190 on virus concerns. Against a basket of currencies =USD the dollar is headed for a third quarterly loss in a row and is down 12.5% from a three-year peak in March. prices dropped on expectations of lower demand, with U.S. crude CLc1 recently down 0.34% at $47.63 per barrel, while Brent LCOc1 was 0.55% lower at $50.63.
Spot gold XAU= rose 0.1% to $1,878.15 per ounce, with the safe-haven asset hitting a one-month high earlier in the session.