Asia Stocks Under Pressure as Covid-19 Vaccine Rally Falters

Asia stocks are likely to come under pressure on Wednesday, tracking declines on Wall Street while gold prices were buoyed by safe-haven demand as economic indicators pointed to more signs of recession.

Hong Kong futures fell 0.23 per cent and Australian shares were set to open lower, tracking US market losses and as diplomatic tensions between Canberra and Beijing rose. Nikkei futures were little-changed versus Nikkei 225 index's previous close.

Australia and China traded barbs on Tuesday in an increasingly acrimonious spat over Australia's support for a global inquiry into the origins of the coronavirus pandemic.

Wall Street dropped in late-day trade after a report from medical news website STAT said early data from Moderna Inc's Covid-19 vaccine was insufficient. Signs of economic contraction damped the investor enthusiasm seen on Monday, even as more countries loosened coronavirus lockdown restrictions.

"Equity markets have failed to build on Monday's exuberance which was driven in part by the excitement over US drug company Moderna's early Covid-19 vaccine test results," National Australia Bank analysts said in a Wednesday note.

Data showed US homebuilding dropped by the most on record last month and permits for future construction tumbled, fuelling fears the coronavirus pandemic would lead to the deepest economic contraction in the second quarter since the Great Depression.

The Dow Jones Industrial Average fell 1.59%, the S&P 500 lost 1.05% and the Nasdaq Composite dropped 0.54%.

The United States on Tuesday extended restrictions on cross-border travel with Canada and Mexico.

Spot gold prices were little changed and not far from Monday's more than 7-1/2-year high, buoyed by safe-haven appeal amid economic uncertainty.

Europe's STOXX 600 index and MSCI's gauge of stocks across the globe both fell. The euro and European government debt rallied on a Franco-German proposal to fund grants for regions hit hardest by the pandemic.

Oil prices earlier gained after the US Treasury Secretary told lawmakers certain stimulus measures would continue.