All three major US indices ended solidly down Thursday, with the Dow shedding 0.8 percent.

HONG KONG (AFP) - Asian markets were mostly lower Friday on renewed concerns over the threat from coronavirus variants to the global economic recovery.

Japan’s decision to ban fans from most Olympic events, with Tokyo hosting the pandemic-postponed Games under a virus state of emergency, has heightened fears over the spread of infections from new coronavirus strains.

“Covid-19 resurgences remain a key risk for the region, with Japan being the latest to go under a state of emergency to curb spreads ahead of the Tokyo Olympics,” IG Asia market strategist Jun Rong Yeap wrote in a note.

“This may suggest a slower recovery ahead with third-quarter GDP growth probably revised lower.”

Tokyo pared most of its losses to close down 0.6 percent after falling as much as 2.5 percent.

Sydney fell 0.9 percent while Seoul and Taipei were down more than one percent. Shanghai recovered its earlier losses to close virtually unchanged.

Hong Kong was a rare bright spot, closing 0.7 percent higher on bargain hunting following the previous day’s rout which saw the benchmark index fall 2.9 percent on concerns over Beijing’s crackdown on tech titans.

All three major US indices ended solidly down Thursday, with the Dow shedding 0.8 percent.

“The markets have been supported by expectations on economic growth before ... but now investors question whether the economy will normalise given a new wave of Covid-19 because of new variants and stagnation of economic indications,” Okasan Online Securities said.

Sliding bond yields

On the bond market, the yield on 10-year US Treasuries advanced to 1.33 percent, off Thursday’s four-month low of 1.25 percent, while the yield on 30-year Treasury bonds was at 1.96 percent.

“The slide in US 10-year yields this week appears to suggest that bond investors are becoming increasingly concerned about a sharp slowdown in global and US growth prospects, as well as diminishing inflation expectations,” said Michael Hewson, chief market analyst at CMC Markets UK.

Oil prices rose in Asian trade after US government data showed a fall in crude inventory and surging demand in the peak summer driving season.

The Brent contract was hovering around $74.55 a barrel while WTI was at $73.50.

Key figures around 0830 GMT

Tokyo - Nikkei 225: DOWN 0.6 percent at 27,940.42 (close)

Hong Kong - Hang Seng Index: UP 0.7 percent at 27,344.54 (close)

Shanghai - Composite: FLAT at 3,524.09 (close)

Euro/dollar: DOWN at $1.1841 from $1.1850 at 2115 GMT Thursday

Pound/dollar: UP at $1.3789 from $1.3785

Euro/pound: DOWN at 85.88 from 85.90 pence

Dollar/yen: UP at 110.05 from 109.73 yen

Brent North Sea crude: UP 0.58 percent at $74.55 per barrel

West Texas Intermediate: UP 0.77 percent at $73.50 per barrel

New York - DOW: DOWN 0.8 percent at 34,421.93 (close)

London - FTSE 100: UP 0.5 percent at 7,062.52