REUTERS: Asian stocks were set to join a global sell-off on Thursday as worries about surging coronavirus cases in Europe and the United States sent investors scrambling for safe-haven assets.
Australia's ASX 200 fell 1.73per cent in early trade, while Hong Kong's Hang Seng index futures were off 0.8per cent.
Japan's Nikkei 225 futures were up 0.24per cent but down 1.23per cent from the underlying index's close on Wednesday.
MSCI's gauge of stocks across the globe was down 2.89per cent.
Surging coronavirus cases in the United States and Europe were a growing concern as French and German leaders announced new lockdown measures to combat rising infections. Worsening matters for investor enthusiasm were dwindling hopes for any imminent U.S. economic relief package with a presidential election less than a week away.
"Risk sentiment took a nose dive on Wednesday amid more concern around the spread of COVID-19 and renewed restrictions in Europe," ANZ analysts wrote in a note. "This was seen alongside ongoing concerns about failure to agree on U.S. fiscal aid before the election next week, adding to a weak economic picture."
U.S. and European stocks faced a brutal trading day on Wednesday with major Wall Street indices down 3per cent and the Dow at its lowest levels since late July. Energy and technology stocks led the declines.
The Dow Jones Industrial Average fell 3.43per cent, the S&P 500 lost 3.53per cent, and the Nasdaq Composite dropped 3.73per cent.
Wall Street's "fear gauge" is on pace for its biggest weekly jump since March, when the pandemic took off in the United States. The Cboe Volatility Index surged on Wednesday to its highest level since June, ending at 40.28.
Looming large ahead is Thursday's advance report on U.S. third-quarter economic growth, with analysts expecting record growth but not enough to make up for the hit from the pandemic.
A closely watched estimate model used by the Atlanta Federal Reserve shows third-quarter growth at a 37per cent annualized pace, which would only account for about 71per cent of the US$2.2 trillion in lost output so far in 2020.
Oil also took a big hit Thursday, falling over 5per cent to a four-month low as coronavirus concerns weighed on demand expectations. Brent futures fell US$2.08, or 5.1per cent, to settle at US$39.12 a barrel, while U.S. West Texas Intermediate (WTI) crude fell US$2.18, or 5.5per cent, to US$37.39.
Investors seeking a safe-haven moved into the greenback with the dollar index rising 0.3per cent against a basket of six currencies.
The flow to the dollars weighed on gold with the yellow metal settling down 1.56per cent at US$1,877.06 per ounce, after falling as much as 2per cent on Wednesday.
Benchmark 10-year notes last rose 1/32 in price to yield 0.7743per cent.
(Reporting by Pete Schroeder; Editing by Sam Holmes)