NEW YORK: Golden retrievers Buddy and Barley greet customers at the Six Harbors Brewing Company in Huntington, New York. Long Island begins Phase 3 of reopening, allowing restaurants to seat inside at 50 percent capacity and nail salons to open by appointment only. – AFP

SINGAPORE: Asian stocks posted their biggest drop in eight sessions, bonds rose and the US dollar was firm yesterday as surging US coronavirus cases and an International Monetary Fund downgrade to economic projections knocked confidence in a recovery. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7%, Tokyo's Nikkei slumped 1.1% and Australia's ASX 200 tumbled 2.1%.

US stock futures declined 0.4%, suggesting Wednesday's Wall Street slide might have further to run. In Europe, however, where strong data has supported risk appetite this week, futures were only marginally in the red. German DAX futures were down 0.1% and EuroSTOXX 50 futures were off 0.3%. Britain's FTSE futures fell 0.4%. Florida, Oklahoma and South Carolina reported record increases in new cases on Wednesday. Seven other states had record highs earlier in the week and Australia posted its biggest daily rise in infections in two months.

The governors of New York, New Jersey and Connecticut ordered travellers from eight other states to quarantine on arrival, a worry for investors who had mostly been expecting an end to pandemic restrictions. Disney has delayed the re-opening of theme parks and resorts in California, while Texas is facing a "massive outbreak" and considering new localized restrictions, Governor Greg Abbott said in a television interview. Australian airline Qantas said yesterday it doesn't expect sizeable international operations until at least July 2021, as the carrier announced plans to sack a fifth of its workforce and raise $1.3 billion to stay afloat.

The International Monetary Fund said it now expects a deeper global recession, with output to shrink 4.9% this year, much sharper than the 3% contraction predicted in April. "There is a little bit of reality bites coming," said Damian Rooney, senior institutional salesman at stockbroker Argonaut in Perth. "I don't think there was a particular straw that broke the camel's back, but people are a little bit twitchy - there are a lot of reasons to be pretty cautious." The dollar clung on to broad overnight gains which had lifted it from near a two-week low. Yields on benchmark 10-year US Treasuries fell to a ten-day low of 0.6692%. Markets in Hong Kong and mainland China were closed for public holidays yesterday.

Anxiety is likely to remain heightened ahead of US data, including jobless claims figures due at 1230 GMT, as well as the latest coronavirus numbers. Confidence could be dented by disappointment on either count. "Any improvement in jobs might be counteracted if there is another pickup in the case load in the United States," said Kyle Rodda, market analyst at brokerage IG in Melbourne. "It's a potential handbrake on the growth rebound story." Bank of England chief economist Andy Haldane is also due to speak about the future of society at 1700 GMT. Haldane argued against last week's increase to the bank's bond-buying programme.

On top of virus concerns, worrying signals on the trade front and political uncertainty have unnerved investors. The United States has added items valued at $3.1 billion to a list of European goods eligible to be hit with import duties. The Trump administration has determined that China's Huawei and video surveillance company Hikvision, are owned or controlled by the Chinese military, laying the groundwork for sanctions and fresh Sino-US tension. That has stalled a rally in riskier currencies, and pushed the Australian dollar under 69 cents and had the kiwi stuck around 64 cents. Gold steadied at $1,761.85 an ounce. US crude futures fell by 26 cents a barrel or 0.7% to $37.75 and Brent crude futures fell 0.8% to $39.99.- Reuters