Asian shares lower, US futures up after S&P 500 sinks 3.5%

Asian shares declined Thursday and U.S. futures were higher after the S&P 500 slid 3.5% overnight for its biggest drop since June.

The selling in U.S. markets followed broad declines in Europe, where the French president announced tough measures to slow the virus’ spread and German officials agreed to impose a four-week partial lockdown.

So far, the measures are not as stringent as shutdown orders that swept the world early this year, but the worry is they could still hit the already weakened global economy.

In Asia, some countries appear to be keeping the pandemic in check, while caseloads surge in others. India surpassed 8 million confirmed COVID-19 cases, second only to the U.S., with nearly 8.86 million. Indonesia and the Philippines are struggling to keep outbreaks in check, and fresh clusters of cases are being reported in Japan.

“When it rains, it pours, particularly if you are following today’s COVID-19 headlines," Edward Moya of Oanda said in a commentary. “An overvalued stock market was ripe for a pullback, but when you focus on COVID-19 headlines, it looks more like panic-selling."

The Bank of Japan kept its ultra-loose monetary policy unchanged in a policy meeting that ended Thursday. But it downgraded its outlook for the economy, saying that while conditions will eventually improve, “risks to both economic activity and prices are skewed to the downside, mainly due to COVID-19."

Retail sales in Japan, the world's third largest economy, fell 8.7% from a year earlier in September, according to data reported Thursday. While purchases of goods has recovered somewhat, services remain weak.

The Japanese central bank has been pumping tens of billions of dollars into the economy every year, trying to restore stable growth as the country's population...