Stock markets slid on April 20 after Wall Street pulled back from record levels in overnight trade and with Japan fearing a renewed Covid-19 surge.

Both the Dow and the S&P 500 finished last week at new peaks and also posted their fourth consecutive weekly gains, following on the heels of strong data for US housing starts, employment and retail sales.

But analysts said that a combination of some dollar weakness and a lull in fresh data ahead of upcoming corporate results had dampened enthusiasm.

“It seems like investors might be having a bit of a second thought up here as US earnings season starts to heat up and peak optimism is beginning to set in,” said Stephen Innes of Axi.

Investors were looking to “cash in some chips” to move back into real world assets, after more falls for bitcoin.

The Nikkei was down two per cent at the end of trade after investors took in calls for new states of emergency in the Osaka region and possibly Tokyo, prompted by rising case numbers.

The new measures could involve tougher restrictions including asking shops and restaurants to close, according to local media.

“Along with increased new coronavirus infections, the possibility of a state of emergency declaration is growing, which is turning on an amber light for economic recovery,” Okasan Online Securities said in a commentary.

NAB analyst Rodrigo Catril added that “US dollar weakness … mostly appears to be driven by European strength.

“The market has become slightly more optimistic around the European vaccine rollout and economic outlook of late … As the rollout picks up, European equities should also start to outperform,” he added.

Wall Street’s dream run was also likely to lose momentum with an ongoing Senate battle in Washington over the size of proposed corporate tax increases and the extent of infrastructure stimulus, Catril added.

Oil prices rose one per cent, a year after the pandemic pushed them into negative territory.

Axi’s Innes cautioned the commodity was still “trading on a jittery note” in the wake of rising coronavirus cases in Asia.

Expectations that the US and Iran could eventually return to a nuclear deal, potentially within weeks, were also stabilising price growth, he added.