Asian stocks fell broadly on Friday on concerns that the spread of the Delta variant of COVID-19 across the world and low vaccination rates could pose a threat to the global recovery.

Chinese shares ended marginally lower as a major U.S. shares index removed more Chinese companies from its index after an updated U.S. executive order barring domestic investment in firms with alleged ties to China’s military.

Hong Kong’s Hang Seng index rose 0.7 percent to 27,344.54 after briefly dipping into bear market territory.

Japanese shares extended losses for a third day amid concerns that a state of emergency to contain a resurgence of a fresh wave of COVID-19 infections will slow the economic recovery.

The Nikkei average dropped 177.61 points, or 0.63 percent, to finish at 27,940.42, while the broader Topix index closed 0.41 percent lower at 1,912.38.

Seven & I Holdings, Kawasaki Kisen Kaisha, Chugai Pharma, Suuki Motor, Sumitomo Realty, Fanuc and Daikin Industries fell 2-3 percent while J Front Retailing, Eisai and Hitachi Zosen all rose over 2 percent. Heavyweight SoftBank Group recouped some early losses to end 0.7 percent lower.

Australian markets fell sharply after two straight sessions of gains, as Sydney battled its worst outbreak of this year.

The benchmark S&P/ASX 200 index dropped 68.10 points, or 0.93 percent, to 7,273.30 while the broader All Ordinaries index ended down 69.60 points, or 0.91 percent, at 7,545.30.

Tech stocks led losses, with Appen, Wisetech Global and Afterpay losing 3-5 percent. Mining heavyweights BHP and Rio Tinto ended down around half a percent as iron ore prices fell on demand worries.

Seoul stocks fell for the third straight session after the government said it would impose the strictest Level 4 restrictions in greater Seoul for two weeks to curb a new wave of coronavirus infections. The Kospi average slumped 34.73 points, or 1.07 percent, to settle at 3,217.95.

The country added 1,316 new daily cases of COVID-19 today, marking the highest number since the first confirmed virus case on Jan. 20, 2020. LG Chem lost 3 percent and Hyundai Motor declined 1.5 percent, while SK Telecom advanced 1.6 percent.

New Zealand shares fell, with the benchmark NZX 50 index settling 0.49 percent lower at 12,690.35 as the COVID-19 delta variant continued to spread even in countries with high vaccination rates, such as Israel and the United Kingdom.

U.S. stocks ended firmly in negative territory overnight and Treasury yields sank for a fourth day, as worries about the rapid spread of Delta variant of the coronavirus and disappointing jobless claims data added to concerns about the economic outlook.

The Dow shed 0.8 percent, the tech-heavy Nasdaq Composite fell 0.7 percent and the S&P 500 gave up 0.9 percent.

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