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Asia Pacific markets drop as South Korea and Australia plunge more than 3%

Stocks in Asia Pacific dropped in Friday morning trade after an overnight plunge on Wall Street amid fears of a second wave resurgence of the coronavirus pandemic.

South Korea’s Kospi led losses among the region’s major markets, plummeting 3.4% in morning trade as shares of automaker Hyundai Motor fell more than 5%. The Kosdaq index also dropped more than 3%.

In Japan, the Nikkei 225 slipped 2.5% while the Topix index fell 2.46%.

Meanwhile, Australia’s S&P/ASX 200 declined 3.32%.

Overall, the MSCI Asia ex-Japan index traded 1.42% lower.

Investor reaction to the overnight drop stateside, which saw stocks suffering their biggest one-day plunge since March, was watched on Friday. The Dow Jones Industrial Average plunged 1,861.82 points, or 6.9%, to close at 25,128.17. The S&P 500 slid 5.9% to 3,002.10 while the Nasdaq Composite dropped 5.3%. to end the day at 9,492.73

“Yesterday’s new infection numbers brought the total number of  US COVID19 cases to above two million, with a number of localised hotspots — 18 states are seeing an increase, including Arizona, Florida, Texas and parts of California. And globally, Wednesday’s new case load of 135,000 is the highest daily tally to date,” Ray Attrill, head of foreign exchange strategy at National Australia Bank, wrote in a note.

“Whether the latest COVID-19 news is fanning concerns about fresh lockdowns with all that entails for economic activity, or (and perhaps more realistic, in the US at least) a more extended period of cautious consumer behaviour, it is doubtless a factor behind the sharp falls in stocks,” Attrill said.

Oil prices plunge

Oil prices dropped in the morning of Asian trading hours, with international benchmark Brent crude futures down 3.81% to $37.08 per barrel. U.S. crude futures also slipped 4.84% to $34.58 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 96.813 after rising from levels around 96 earlier.

The Japanese yen traded at 106.66 per dollar after strengthening from levels above 107 seen yesterday. The Australian dollar was at $0.6807 after plunging from levels above $0.696 observed in the previous trading day.

— CNBC’s Fred Imbert contributed to this report.

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