Asia-Pacific stock markets kick off week with gains as traders see progress on coronavirus, like Donald Trump signing stimulus

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

‘A shock like no other’: Commodity slide to pressure Indonesia

Global commodity prices are expected to tumble this year in a way unseen since the 1900s. This is bad news for major commodity exporting countries like Indonesia. The World Bank’s 2020 commodity outlook report projects a 40.3 percent decline in energy commodity prices from last year’s average. This is accompanied by drops in industrial metal prices (13.2 percent) and agricultural prices (1.1 percent). Such observations are not new but the report, released on April 23, provides a quantitative measure of COVID-19′s impact on commodity markets. The World Bank describes the impact as “a shock like no other” since the 1900s, including the 1980 global recession, the September 11 terrorist attacks and the 2014 Ebola outbreak in Africa. “This will add pressure for Indonesia,” economist Piter Abdullah of the Perbanas Institute told The Jakarta Post o…

Hong Kong and other Asia-Pacific stocks gained at the start of the week, with sentiment boosted by President Donald Trump signing a $484 billion virus-relief bill and US and European countries beginning to loosen quarantine restrictions.

Hong Kong stocks were strong coming out of the gate, while mainland stocks mostly shrugged off fresh data out of China showing its industrial profits plunged 34.9 per cent in March year-on-year far more than the 10 per cent contraction economists surveyed by Bloomberg expected. But, as with other recent data showing the damage of the virus to the world’s second-largest economy, traders set their sights ahead.

“Bad economic data in the first half is acceptable and expected by the market and already priced in,” said Alan Li, portfolio manager at Atta Capital. “People are looking forward to the recovery.”

The Hang Seng Index gained 1.9 per cent, led by property stocks. New economy stocks also outperformed, including Ping An Good Doctor, China’s top online health platform, and e-pharmacy giant Ali Health.

The Shanghai Composite Index rose 0.3 per cent. Hot stocks included those related to vaccines, cosmetics and agricultural machinery. (For in-depth coverage of the Hong Kong and mainland markets, see the Stocks Blog each trading day.)

Meanwhile, Japan’s central bank took steps for the second straight month to ease monetary policy to help cash-strapped businesses. The steps include additional purchase of commercial papers and corporate bonds, which help get cash to struggling businesses, the Associated Press reported. It kept interest rates unchanged, as expected.

The Japan’s Nikkei 225 rallied 2.7 per cent.

The week will be full of headlines for traders, as the US Federal Reserve and the European Central Bank announce policies as the coronavirus pandemic continues to damage economies.

Nearly 3 million people around the globe have been infected with the virus, with more than 200,000 people dead, about one of four of them in the US.

It will be a short week for Hong Kong traders, with the market closed Thursday and Friday. China markets will be closed Friday, and Monday and Tuesday next week for holidays.

In addition, earnings season remains in full swing, with China cement giant Anhui Conch Cement reporting after market close Monday, HSBC and WH Group reporting Tuesday, and Air China and China Southern Airlines reporting Wednesday.

Elsewhere in the region, South Korea’s Kospi gained 1.8 per cent, while the tech-heavy Kosdaq rose 2.2 per cent.

Speculation over North Korean leader Kim Jong-un’s health intensified over the weekend amid conflicting reports about whether he was gravely ill.

China sent a team that included health care experts to its long-time ally to advise on Kim, Reuters reported on Saturday, citing three people familiar with the matter. A train resembling one long used by North Korean rulers has been parked at his compound on the country’s east coast in Wonsan since last week, satellite imagery showed.

In Australia, the S&P/ASX200 gained 1.5 per cent. The country will close its international borders for at least three to four months to contain the spread of the coronavirus.

Singapore’s Straits Times Index gained 1.4 per cent. Singapore, which has one of Asia’s smallest populations, is the region’s most infected nation behind only China and India.

New Zealand’s market was closed for the Anzac Day holiday.


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