Asia-Pacific markets mixed as investors anxiously await China GDP data after US figures disappoint

17-Apr-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

Hong Kong declined while other Asia-Pacific stocks were mixed on Thursday as caution reigned after the US reported dismal retail, manufacturing and home building data.

The Hang Seng Index fell 0.6 per cent to 24,006.45 on Thursday, weighed down by finance sector stocks. WH Group, the world’s largest pork processor, fell 0.8 per cent to HK$7.45, after its subsidiary Smithfield Foods shut two more US plants because of the coronavirus.

Investors are also looking nervously to Friday when China releases its gross domestic product (GDP) data for the first quarter, which will show how badly the world’s second largest economy has been battered by the coronavirus pandemic.

“Any recovery in risk sentiment depends on how quickly economies can reopen without risking overloading their health care systems and, most of all, not risking any chance of a secondary spread,” said Stephen Innes, chief global strategist at currency trading platform, AxiCorp. “The risk of escalating economic damage is putting governments under immense pressure to relax social-distancing measures sooner, rather than later.”

The world’s total novel coronavirus cases topped 2 million. It took about four months for the virus to infect 1 million people and only 12 days for that number to double.

Investors and fund managers are looking to buy the dip in Hong Kong as the worst of Covid-19′s impact on the market may be over, said Louis Tse, managing partner at VC Asset Management.

“The worst is over for Hong Kong but it will take a lengthy time to go back up to 26,000 to 28,000 points,” he said, adding that the Hang Seng Index would fluctuate around the psychologically important 24,000-point level if global coronavirus infections stabilised.

Meanwhile, most investors have already braced themselves for China’s dismal first quarter GDP on Friday, Tse added.

On the mainland, the Shanghai Composite Index added 0.3 per cent to 2,819.94, after see-sawing in the day.

The Federal Reserve said the US economy “contracted sharply” due to the coronavirus pandemic in its Beige Book survey released on Wednesday.

US retail sales plunged 8.7 per cent in March, the largest drop on record, according to Commerce Department data released on the same day. The Fed also said US manufacturing production fell 6.3 per cent last month, the biggest drop since 1946.

In the Asia-Pacific region, Japan’s Nikkei 225 finished down 1.3 per cent, after declining 0.5 per cent on Wednesday.

Japan plans to expand its initial lockdown of Tokyo, Osaka and five other prefectures to the rest of the nation as coronavirus cases continue to rise, the Yomiuri newspaper reported on Thursday.

South Korea’s Kospi was flat at the close while the tech-heavy Kosdaq jumped 2.2 per cent. The country’s markets were closed for the general election on Wednesday, in which President Moon Jae-in’s left-leaning ruling party won a landslide victory.

Australia’s S&P/ASX200 ended 0.9 per cent lower, widening its losses from a 0.4 per cent drop on Wednesday. The country’s jobless rate rose slightly to 5.2 per cent from 5.1 per cent a month ago, better than economists’ estimates.

New Zealand’s NZX 50 Gross Index gained 0.6 per cent, building on its 2.4 per cent rise the day before. The country is expected to start easing the nationwide coronavirus lockdown next week.

In Singapore, the Straits Times Index rose 0.3 per cent, after falling 1.5 per cent on Wednesday.


Category: FinanceAsia

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