Asian shares up, Shanghai slips as virus fears cloud outlook

TOKYO (AP) — Asian shares were mostly higher Monday, but fears of further waves of coronavirus outbreaks were clouding the economic outlook for the region, tempering the rally.

Japan's benchmark Nikkei 225 rose 0.3% to 30,35.62. Australia's S&P/ASX 200 gained 0.7% to 7,393.60. South Korea's Kospi added 0.6% to 3,142.08. Hong Kong's Hang Seng added 1.2% to 24,479.52, while the Shanghai Composite shed 0.5% to 3,595.97.

Japan's ruling party holds an election later this week to choose a leader, who is likely to succeed Yoshihide Suga as prime minister after just one year in office. All the candidates are certain to stick to the nation's pro-U.S. policies, despite some nuances in their views.

They also are all promising to boost government spending to try to catalyze growth in the world's third largest economy.

Analysts also say Japan’s central bank “tankan” economic survey for the third quarter, due out Friday, likely will show a deterioration in business conditions because of various disruptions to supply chains and renewed outbreaks of COVID-19 in many regions.

Although some parts of the world have lifted COVID-19 restrictions and are gradually returning to “normal” life, worries remain in Asia about further waves of infections because vaccine rollouts have been slower than the West in some nations.

In Singapore, further COVID-19 restrictions kicked off in an attempt to curb the virus' spread, as daily new cases have topped the city-state's peak reached in April 2020.

“”Overall, the manufacturing sector may remain resilient as seen from previous phases of restrictions, but the services sector may come under pressure. That said, previous business adjustments and softer tightening compared to past restriction phases may aid to reduce some impact," said Yeap Jun Rong,...