Global shares drop after US stocks' worst day since October

TOKYO (AP) — Global shares skidded on Thursday as a reality check set in about longtime economic damage from the coronavirus pandemic, giving Wall Street its worst day since October.

France's CAC 40 slipped 0.7% in early trading to 5,422.70, while Germany's DAX dropped 1.2% to 13,463.25. Britain's FTSE 100 was down 1.6% at 6,460.34. U.S. shares were set to extend lossses, with Dow futures trading at 30,068.0, down 0.4%. The S&P 500 future contract slipped 0.8% to 3,716.12.

Benchmarks in Japan, South Korea, Australia and China declined Thursday. The region is looking ahead to earnings season for a read on how companies are faring amid COVID-19 infections, which have been relatively low in some nations such as New Zealand, compared to other global regions.

Japan's benchmark Nikkei 225 fell 1.5% to finish at 28,197.42. Australia's S&P/ASX 200 slipped 1.9% to 6,649.70. South Korea's Kospi sank 1.7% to 3,069.05. Hong Kong's Hang Seng dropped 2.6% to 28,550.77, while the Shanghai Composite shed 1.9% to 3,505.18.

“Investors will likely focus on the pace of vaccinations around the globe while also keeping an eye on the progress of President Biden’s fiscal rescue plan that may be facing some roadblocks in the U.S. Senate,” Prakash Sakpal and Nicholas Mapa, senior economists at ING, said in a report.

Hopes are high for President Joe Biden's proposed a $1.9 trillion COVID-relief package, but worries are growing the plan might also be scaled back.

Vaccine rollouts have not progressed in Asia as quickly as they have in the West, and worries are growing about a tug-of-war for the products from Pfizer, Moderna and AstraZeneca. Aside from China, which has its own vaccine, inoculations have not started on a mass scale in Asia, although approvals have either been granted or are on their way in most places, including Australia and Japan.

Outbreaks persist and have grown in some places such as Japan, where a third wave is claiming more lives at a much faster pace than last year, at more than 5,000 so far. Daily deaths had been mostly in single-digit figures until recently, but are now surpassing 100 people a day.

Adding to caution, the Federal Reserve said Wednesday it would keep its low interest rate policies in place, but it also released a sobering assessment of the gradual recovery ahead.

Some analysts said the selling was at least partly a reaction to outsized moves in GameStop, AMC Entertainment and select other previously beaten-down stocks that have notched massive gains in recent days after gaining favor with an online community of individual investors.

Investors are also focusing on company earnings. More than 100 companies in the S&P 500 are scheduled to tell investors this week how they fared during the last three months of 2020.

Markets had been meandering near record highs since last week as investors weighed solid corporate earnings results against renewed worries that troubles with COVID-19 vaccine rollouts and the spread of new variants of coronavirus might delay a recovery from the pandemic.

“The real economy isn't reflective of what's happening in financial markets and there really is a disconnect there,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

In energy trading, benchmark U.S. crude lost 39 cents to $52.46 a barrel in electronic trading on the New York Mercantile Exchange. It picked up 24 cents to $52.85 per barrel on Wednesday. Brent crude, the international standard, fell 32 cents to $55.49 a barrel.

In currency trading, the U.S. dollar rose to 104.33 Japanese yen from 104.12 yen. The euro cost $1.2096, inching down from $1.2112.

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AP Business Writers Damian J. Troise, Ken Sweet and Alex Veiga contributed.

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