Asian markets down on virus impact fears

17-Apr-2020 Intellasia | AFP | 6:02 AM Print This Post

Asian markets fell on Thursday following overnight woes on Wall Street as more negative US economic data fuelled worries about the full impact of the coronavirus pandemic.

There had already been a spate of grim economic forecasts this week, with the IMF warning of the worst global downturn in a century, and poor US economic figures released Wednesday further spooked investors.

The woes on Wall Street discouraged traders in Asia, where Tokyo closed down 1.3 percent, Hong Kong ended 0.6 percent lower, Sydney lost 0.9 percent and Taipei shed 0.7 percent.

Seoul was flat, while Shanghai closed 0.3 percent higher and Singapore was up 0.7 percent.

The latest numbers from the United States, the world’s biggest economy, highlighted the scale of the damage unleashed by lockdowns and social distancing measures imposed to try and stop the spread of the virus.

US retail sales plunged in March while industrial production in the same month suffered its steepest drop since 1946, data showed Wednesday.

Other reports pointed to weak homebuilder sentiment and manufacturing conditions, while a Federal Reserve report said American economic activity “contracted sharply”.

“The economic data was nothing short of disastrous,” Ann Miletti of Wells Fargo Asset Management told Bloomberg TV.

“How long can you sustain the shutdown is what’s on investors’ minds.”

European equities bounced back in early Thursday trading despite the negative cues from Asia and Wall Street.

London was up 0.3 percent, Frankfurt was 1.3 percent higher and Paris gained 1.2 percent.

Crude concerns

President Donald Trump has said that he will on Thursday announce the first plans for lifting lockdowns in the USthe worst-hit country with the most virus deaths and infections.

The World Health Organization has warned, however, that lifting virus-related restrictions too early could have devastating consequences, with fears of a possible second wave of infections.

“Any recovery in risk sentiment depends on how quickly economies can reopen without risking overloading their healthcare systems and, most of all, not risking any chance of a secondary spread,” said Stephen Innes, chief global markets strategist at AxiCorp.

“The risk of escalating economic damage is putting… governments under immense pressure to relax social distancing measures sooner, rather than later.”

There was more bad news on oil markets, with the International Energy Agency warning that 2020 was likely to be “the worst year in the history” of the sector.

Oil has plummeted in recent weeks to multi-year lows as coronavirus lockdowns depressed demand, and the crisis was made worse by a pricing war between top producers Saudi Arabia and Russia.

Riyadh, Moscow and other producers agreed to an output cut but investors are worried that the dramatic production curbs will not be enough to stabilise the crude market.

Brent Crude was down 0.4 percent, while West Texas Intermediate was up 0.6 percent but still just under the $20-a-barrel mark.

Key figures around 0815 GMT

TokyoNikkei 225: DOWN 1.3 percent at 19,290.20 (close)

Hong KongHang Seng: DOWN 0.6 percent at 24,006.45 (close)

ShanghaiComposite: UP 0.3 percent at 2,819.94 (close)

LondonFTSE 100: UP 0.3 percent at 5,612.99

euro/dollar: DOWN at $1.0874 from $1.0910 at 2040 GMT Wednesday

Dollar/yen: UP at 107.80 from 107.48

Pound/dollar: DOWN at $1.2483 from $1.2528

euro/pound: UP at 87.12 pence from 87.07

West Texas Intermediate: UP 0.6 percent at $19.99 per barrel

Brent North Sea crude: DOWN 0.4 percent at $27.59 per barrel

New YorkDow: DOWN 1.9 percent at 23,504.35 (close) finance.html


Category: FinanceAsia

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