Equity markets in Asia were mixed yesterday, but the COVID-19 pandemic is keeping traders on edge as it sweeps the planet, with infections approaching 1 million and nations forced to tighten already strict lockdown measures.
Oil soared 10 percent on hopes for a US intervention to end a Saudi Arabia-Russia price war, with US President Donald Trump saying that he expected the two to resolve the row, while dealers were also cheered by China’s decision to enter the market.
After two weeks of much-needed gains fueled by trillions of US dollars in stimulus and widespread monetary easing, focus has returned to the devastation wrought on populations and the long-term effects of the pandemic.
Photo: AP
Trump’s COVID-19 task force has said that the US could see almost 250,000 deaths and the president warned of a “horrific” couple of weeks ahead.
His sobering comments came as a number of nations said that they would extend lockdowns, which have already gouged economies worldwide.
Adding to the unease on trading floors was a report saying that Beijing had masked the true extent of the virus in China, which is just coming out of an extended shutdown.
“The incremental news on the virus in the last 24 to 48 hours has been disappointing,” Mellon Investments Corp’s John Porter told Bloomberg TV.
“The global economy has hit a wall, there’s a tremendous amount of uncertainty, and that’s contributing to the volatility in the markets and the downward trajectory we’ve seen the last few days,” Porter said.
US and European markets on Wednesday fell about 4 percent, with investors ignoring data showing far fewer private-sector jobs were lost last month than expected.
The selling extended into Asia early on, but investors managed to pare the losses, with some markets moving into positive territory.
Tokyo ended down 1.4 percent, while Sydney and Kuala Lumpur shed 2 percent apiece and Singapore dropped 0.2 percent. There were also losses in Wellington and Manila.
“Concerns are growing as infection cases are rising in Japan, as well as in the US and Europe,” Rakuten Securities Inc chief strategist Masayuki Kubota said.
“Japan at one point was considered a nation that was succeeding in containing infections, but the recent acceleration has prompted serious concerns,” he said.
“We assume that only the Bank of Japan has been buying massively this week,” he added.
Hong Kong shares yesterday reversed early losses to end on a high, adding 0.84 percent, while Shanghai rallied 1.7 percent.
Seoul and Bangkok both rose more than 2 percent and Jakarta put on more than 1 percent.
Taipei was closed due to the four-day Tomb Sweeping Day weekend.
“With the global economy in free fall, markets have gone back to risk-off mode ... as investors are struggling to look through President Trump’s ominous forecast suggesting Americans could keep dying into June,” AxiCorp Financial Services Pty market strategist Stephen Innes said.
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