Asian stocks followed Wall Street's sharp selloff on Thursday as concerns about rising coronavirus infections and new shutdowns in major US cities hosed down earlier investor enthusiasm about COVID-19 vaccine developments.

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Bearish sentiment triggered a late-session retreat in stock markets on Wednesday after a surge in new COVID-19 infections prompted New York City, which has the largest school district in the United States, to halt in-person learning starting from Thursday.

The news of the shutdowns overshadowed Pfizer Inc's announcement that its COVID-19 vaccine was 95 percent effective and that the company would apply for emergency US authorization within days. Pfizer's vaccine has a similar effectiveness as the candidate developed by Moderna Inc.

"It's like a seesaw, the fight between the growth of COVID and the excitement about the vaccine is really weighing on the market," said Hilary Kramer, chief investment officer for Kramer Capital Research in New York.

Australia's S&P/ASX lost 0.5 percent in early trading, while Hong Kong's Hang Seng index futures lost 0.02 percent. Japan's Nikkei 225 fell 0.4 percent.

New York City joined other large school districts in cities like Boston, Detroit, Las Vegas, Philadelphia that have recently cancelled in-person learning due to rising coronavirus cases.

Forty-one US states have reported record daily increases in COVID-19 cases in November, 20 have registered record daily deaths and 26 have reported new peaks in hospitalizations, according to a Reuters tally of public health data.

Despite upbeat vaccine developments, the prospect of roll-backs of reopenings and new lockdowns weighed on market participants. All 11 major sectors in the S&P 500 closed in negative territory, with energy shares suffering the biggest loss.

The Dow Jones Industrial Average fell 1.16 percent, the S&P 500 lost 1.16 percent, and the Nasdaq Composite dropped 0.82 percent.

Richmond Federal Reserve President Thomas Barkin said allowing the Fed's emergency lending programs to sunset on December 31 could pose risks to financial markets, especially as the pandemic is escalating.

The dollar moved off earlier lows following better-than-expected US housing data, with the greenback still on pace for its fifth straight decline as the Pfizer news gave investors an appetite for some risk-taking.

The dollar index fell 0.043 percent, with the euro down 0.05 percent to $1.1855.

US Treasury yields reversed early declines on optimism about a potential vaccine and after a weak 20-year bond auction diminished the appeal of the safe-haven debt. Benchmark 10-year notes last fell 1/32 in price to yield 0.875 percent, from 0.872 percent late on Tuesday.

Oil prices advanced as the vaccine news buoyed investor appetite, along with hopes OPEC and its allies will delay a planned increase in oil output.

US crude settled up 0.94 percent at $41.82 per barrel and Brent <LCOc1> was at $44.34, up 1.35 percent on the day.

First Published:Nov 19, 2020 10:19 AM IST