Asia-Pacific stock trading cautious as coronavirus worries dampen sentiment

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

Asia-Pacific markets were mixed in cautious trading Wednesday, after the daily coronavirus death tolls in the US and UK reached their highest level and late-day jitters took over Wall Street to leave it with small losses.

Investors have faced a barrage of coronavirus data, charts and predictions to sort through each day in trying to determine the direction of highly volatile global markets. More than half of the planet’s population is under lockdown, and governments and central banks have thrown massive fiscal and monetary stimulus at the virus, which has dragged the world into a recession.

China, after reporting no virus-related deaths Tuesday for the first time since January, said on Wednesday morning that two people have since died. Meanwhile, even as the US has the most cases and deaths the world, President Donald Trump’s economic adviser told Fox News on Tuesday that the Trump “would like to reopen the economy as soon as he can,” possibly in a few weeks.

“Trying to factor in the mix of epidemiology, psychology, and politics is troubling,” said Stephen Innes, chief global strategist at AxiCorp.

“And while we know economic data is missing or poor quality, but if the Covid-19 data proves to be unreliable, then we will be in a world of hurt afloat in a sea of red in a rudderless ship, especially with investors trading on sentiment rather than the economics for now,” he said.

The Hang Seng Index fell 1 per cent at the lunch break, local time, putting it on track to snap a two-day winning streak. HSBC turned up after early losses, putting it on track for a third straight day of gains following its tumble last week when it cancelled dividends.

China stocks declined as well, with the Shanghai Composite Index sliding 0.3 per cent. (For in-depth coverage of the markets, read the Stocks Blog.)

Meanwhile, oil futures in New York gained, as investors bet Saudi Arabia and Russia can agree to reduce output later this week. The two oil producers set off a price war amid the coronavirus outbreak, which had already significantly weakened demand.

Elsewhere in the Asia-Pacific region, South Korea’s Kospi slipped 0.4 per cent, after it gained 1.8 per cent on Tuesday. On Monday, the benchmark surged 3.9 per cent, technically entering a bull market as it closed 23 per cent above its March 19 low.

The country’s tech-heavy Kosdaq rose 0.4 per cent, after advancing 1.6 per cent on Tuesday.

Japan’s Nikkei 225 gained 0.6 per cent, after advancing 2 per cent on Tuesday.

Prime minister Shinzo Abe on Tuesday declared a state of emergency in Tokyo, Osaka and five other prefectures accounting for about 44 per cent of Japan’s population to contain the coronavirus. The government also approved a record near-US$1 trillion stimulus package for families and business. That is equivalent to 20 per cent of Japan’s GDP.

Australia’s ASX 200 rose 0.1 per cent, after falling 0.7 per cent on Tuesday.

New Zealand’s S&P/NZX50 gained 0.1 per cent, after rising 0.5 per cent on Tuesday.

Meanwhile, Singapore’s Straits Times Index lost 2.2 per cent, after it jumped 4.1 per cent on Monday.

China, where the coronavirus pandemic was first reported, will lead the way out of the global economic downturn after taking extraordinary measures to contain the outbreak, according to Wenli Zheng, portfolio manager at T. Rowe Price.

The firm expects social distancing and work from home arrangements to accelerate many trends that were already playing out, such as the growth of e-commerce, food delivery and other online services.


Category: FinanceAsia

Print This Post