Asian shares slipped on Friday as fears about the COVID-19 outbreak once again dominated financial markets.
The TAIEX fell 1.68 percent to 11,321.81 in Taipei, rising 0.26 percent from Thursday last week.
Japan’s benchmark Nikkei 225 dove 2.7 percent to finish at 20,749.75, down 1.9 percent weekly, while the TOPIX fell 2.9 percent to 1,471.46, down 2.6 percent for the week.
India’s SENSEX fell 2.32 percent on Friday, down 1.9 percent for the week, and the NIFTY 50 lost 2.5 percent for the day, also falling 1.9 percent weekly.
The Philippines Stock Exchange Index slipped 1.66 percent on Friday, down 0.3 percent for the week.
The Kuala Lumpur Composite Index on Friday fell 0.5 percent, virtually unchanged for the week.
Australia’s S&P/ASX 200 lost 2.8 percent to 6,216.20 on Friday, bringing its weekly loss to 3.5 percent.
South Korea’s KOSPI on Friday dropped 2.2 percent to 2,040.22, but was up 2.68 percent for the week.
The Shanghai Composite skidded 1.2 percent to 3,034.51, jumping 5.4 percent for the week. The index has rallied nearly 12 percent since scraping bottom on Feb. 3.
The Hang Seng Index (HSI) fell 2.3 percent to 26,146.67 on Friday, while the China Enterprises Index (HSCE) fell 2.5%, to 10,456.93 points.
For the week, the HSI added 0.1 percent, while HSCE, an index tracking Hong Kong-listed mainland firms, gained 1.5 percent as investors welcomed Beijing’s latest supportive measures and expected further stimulus to bolster China’s economy.
Friday’s declines came after a sharp selloff overnight on Wall Street, as large swings in the market continued amid uncertainty over the spread of the coronavirus and its economic fallout.
Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd in Singapore, said the potential damage from the virus was twofold, with the initial effect coming from a direct impact on the economy.
“One succumbs to the sheer fear of community spread, prospects of deep economic impact from a sharp drop-off in demand for travel and seizures in supply chains,” Varathan said in a commentary.
“The other is a strain that thrives on hopes of stimulus; be it frantic central bank rate cuts, the lull of liquidity infusions or more targeted fiscal offsets to provide pain relief,” he said.
LACK OF CLARITY
“All we know now is that we don’t really understand what’s going to happen next,” Marketfield Asset Management LLC chairman and chief executive officer Michael Shaoul told Bloomberg TV.
“It’s probably four, six, eight weeks before we’re going to have any useful information as to what the trajectory of the virus is and what the actual economic fallout looks like,” he said.
Risk assets have whipsawed this week, with traders on edge amid a rise in virus cases, governments extending quarantines and travel restrictions, and a slew of company warnings on the impact to earnings.
Global equities have recovered some of the recent losses, but they still remain about 10 percent below the all-time high reached last month.
The vicious swings are likely to continue as long as the number of new infections continues to accelerate, analysts and professional investors have said.
Additional reporting by staff writer
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
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