Asia markets fall, HSBC tumbles to lowest level since 2009 as investors are ‘flat-out bundle of nerves’ about coronavirus

02-Apr-2020 Intellasia | South China Morning Post | 10:51 AM Print This Post

Asia markets slid Thursday, following a sell-off on Wall Street sparked by growing worries about global economic damage from the coronavirus pandemic.

The US key benchmarks all fell 4.4 per cent, as US factory activity hit its lowest level since August 2009 and President Donald Trump floated the idea of air travel restrictions for hotspot cities, which sent US airline stocks into a tailspin.

“Sentiment remains exceptionally fragile as investors are a flat-out bundle of nerves fretting over the potential impact the coronavirus will have in the US markets and the economy,” said Stephen Innes, chief global markets strategist at AxiCorp. “The duration of economic lockdowns is the most significant unknown for investors.”

The Hang Seng Index fell 0.4 per cent as of 11.14am, led down by British banks, as HSBC and Standard Chartered continued to drop after their heart-stopping losses Wednesday on cancellation of their dividends.

HSBC fell 4.4 per cent to HK$38.20 its lowest since March of 2009 while Standard Chartered declined 1.3 per cent.

The Shanghai Composite Index see-sawed in early trading.

As the world’s death toll topped 46,000, China returned to the spotlight amid questions about whether it is under-reporting deaths and infections, according to Bloomberg, citing a US intelligence report given to the White House.

If the claim were true, that could have slowed the worldwide response to the coming health care disaster that has torn up supply chains, thrown the world into a recession, caused massive job losses and upended global stock markets.

Earlier this week, Caixin magazine quoted a truck driver as saying he had recently delivered about 5,000 urns over two days to Wuhan the epicentre of the outbreak of the virus or about double the number of official deaths reported there. Meanwhile, China has put Jia county in central Henan province into lockdown after a second wave of infections.

Other Asia-Pacific markets saw weakness as gloomy sentiment drove down all benchmarks.

South Korea’s Kospi Index dropped 1.1 per cent and the tech-heavy Kosdaq slid 1.5 per cent.

A government report on Wednesday showed South Korea exports slipping more than expected by 0.2 per cent in March from a year earlier.

Tokyo’s Nikkei 225 retreated 1.7 per cent. On Wednesday, it plunged 4.5 per cent after its worst quarter since 1987. Investors are worried that the capital city of Tokyo could go into its first-ever lockdown, as business sentiment is fragile and Japan’s factory orders fell to their lowest point since April 2009.

Australia’s S&P/ASX200 fell 3.2 per cent, after going up 3.6 per cent on Wednesday. Its stocks have been especially volatile as it faces its worst recession in 90 years.

New Zealand’s S&P/NZX50, which rose 1.3 per cent yesterday, dropped 1.8 per cent.

Meanwhile, Singapore’s Straits Times Index fell 1.8 per cent, after a 1.6 per cent loss on Wednesday.

“With the global economy in free fall, markets have gone back to risk-off mode overnight as investors are struggling to look through President Trump’s ominous forecast suggesting Americans could keep dying into June,” analyst Innes said.

“Now the markets [scramble] to come up with some alphabet letters to analogise a potential economic recovery. Still, it’s going to be anything but a ‘V’ shape recovery. That’s for sure,” he said.


Category: FinanceAsia

Print This Post