Asian stocks slip as coronavirus recession comes back into focus
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Asian stocks were choppy overnight, with many following their US counterparts downwards as investors came to terms with prolonged coronavirus lockdowns in some of the world’s biggest economies.
Japan’s Nikkei 225 index dropped 1.4 per cent, Australia’s S&P ASX fell two per cent and Singapore’s STI fell 0.4 per cent.
Yet China’s Shanghai index rose one per cent and Hong Kong’s Hang Seng rose 0.4 per cent.
US stocks are due to open higher, according to future prices, after a sharp sell-off yesterday.
American investors endured a tough start to the second quarter, with the S&P 500, Dow Jones and Nasdaq all falling 4.4 per cent.
Stock markets were driven lower after the Trump administration warned that as many as 240,000 people could die from coronavirus.
US President Donald Trump rowed back on earlier comments that he would like to see the economy back up and running by Easter. The US will now keep containment measures in place for at least 30 days.
Jim Reid of Deutsche Bank said: “With governments indicating that we’re going to be in a prolonged period of lockdowns… it wasn’t exactly the strongest start to Q2 yesterday for global equity markets.”
“They continued to decline as investors grappled with the implications of the coronavirus moving forward. Last week was the peak week of the great stimulus reveal but this week is seeing the reality of the situation re-emerge.”
Oil prices jumped this morning despite oversupply from Saudi Arabia. Brent crude was up 11.8 per cent at $27.66 per barrel. US crude was 10.2 per cent higher at $22.39 per barrel.
Ipek Ozkardeskaya, senior market analyst at Swissquote Bank, said one reason for this was that “Saudi’s increased production is certainly countered by lower production elsewhere due to the very low oil prices’.
In a sign that investors are calmer this morning, the dollar index has fallen slightly. Investors have in recent weeks rushed to hold cash as they have sold equities.