Reuters - Asia stock indexes retreated Tuesday as worries about increasing COVID-19 deaths and lockdowns overshadowed optimism about the roll-out of vaccinations.
Eurostoxx futures dipped 0.4% and FTSE futures fell 0.6% - indicating a weaker open for European stock markets. E-Mini futures for the S&P 500 were up 0.05%.
Markets showed little reaction to China's industrial output, which grew in line with expectations in November, expanding for an eighth straight month as an economic recovery gathered pace.
The number of coronavirus deaths in the U.S. crossed 300,000 Monday as the hardest-hit country started its first vaccinations - while tighter COVID-19 restrictions were imposed on London.
"While investors can approach 2021 with optimism that an effective COVID-19 vaccine will be available, the path of the economic recovery remains unclear," Allianz Global Investors said in a report.
Most Asia markets retreated, with MSCI's index of Asia-Pacific shares outside Japan falling 0.6% to 637.8, the lowest in more than a week after having hit a string of record highs in recent weeks.
China stock prices eased 0.3% and Hong Kong lost 0.9%.
Markets in Japan and South Korea, both grappling with rising infections and growing public frustration, slipped 0.4% and 0.5%.
Australia stock prices fell 0.4% - pulled down by miners on fears of higher regulatory scrutiny over rising iron ore prices in top consumer China.
News of vaccines has powered gains in the last few months, with the Asian benchmark up nearly 16% so far this year, sitting just shy of a record struck last week. The rally has been led by markets in South Korea, China and Taiwan.
Last week, the U.S. authorized the emergency use of its first COVID-19 vaccine, developed by Pfizer and BioNTech. The vaccine has already been authorized in a handful of countries including Britain and Canada.
"We now know we are building a bridge to somewhere, providing clarity for policymakers, households and companies about getting to a post COVID stage," strategists at BlackRock Investment Institute said in a report.
"Yet disappointing jobs data in recent weeks pointed to near term risks as the virus surges around the U.S., potentially slowing the restart," they said.
On Monday, the S&P 500 closed down 0.4%, the Nasdaq composite gained 0.5% and the Dow Jones Industrial Average hit a record high but fell back 0.6% for the day.
In foreign exchange markets, the British pound was firm against the dollar at $1.3332, after rising 0.8% Monday as the UK and Europe agreed to continue Brexit talks.
The dollar traded near a two-and-a-half-year low against comparative currencies as demand for the safest assets flagged.
U.S. Treasury yields were relatively stable ahead of the Federal Reserve's two-day policy meeting starting Tuesday.
Market expectations are growing that the Federal Reserve will further ease monetary policy by expanding its bond-buying as U.S. politicians struggle to agree on a virus aid package.
Gold prices advanced 0.5% to $1,835.9 per ounce. Oil prices dipped 0.7% to $46.6 a barrel as persistent oversupply largely offset hopes that a rollout of coronavirus vaccines will lift international fuel demand.
