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Asian Markets Decline, Australia Bucks Trend

asiancommentary jan22 29mar20 lt

Asian stock markets, with the exception of Australia, are lower on Monday following the sharp losses on Wall Street Friday as worries about the rising number of coronavirus infections around the world and its impact on the global economy dampened sentiment.

The global number of coronavirus infection cases has risen to more than 720,000. The U.S. has surpassed China as the country with the most number of confirmed coronavirus infections, forcing President Donald Trump to extend the guidelines for national social distancing to April 30.

Bucking the trend, the Australian market is advancing, as investors looked ahead to the announcement of more federal government stimulus measures to support the Australian economy amid the COVID-19 pandemic.

The benchmark S&P/ASX 200 Index is advancing 53.60 points or 1.11 percent to 4,896.00, after rising to a high of 4,934.60 earlier. The broader All Ordinaries Index is adding 47.90 points or 0.98 percent to 4,922.10. Australian stocks reversed course to end sharply lower on Friday, following three days of gains.

In the banking sector, Westpac and Commonwealth Bank are rising almost 3 percent each, while ANZ Banking is advancing more than 1 and National Australia Bank is adding almost 1 percent.

The Australian Banking Association said banks will extend the six-month deferral of loans to 30,000 more business to help them deal with the coronavirus pandemic.

Among the major miners, BHP is lower by more than 2 percent, Rio Tinto is declining more than 1 percent and Fortescue Metals is down 0.3 percent.

Gold miner Newcrest Mining is lower by 3 percent, while Evolution Mining is adding 2 percent even as gold prices fell on Friday.

In the oil space, Santos is losing 5 percent and Oil Search is down 0.4 percent, while Woodside Petroleum is advancing more than 1 percent as crude oil prices tumbled on Friday.

Regional lender Bank of Queensland, insurer QBE Insurance and independent eftos provider Tyro Payments have all withdrawn their earnings guidance amid the coronavirus pandemic. Shares of Bank of Queensland and QBE Insurance are down 0.2 percent each, while Tyro Payments is losing more than 6 percent.

Meanwhile, shares of IAG are rising more than 3 percent after the insurer maintained its earnings outlook for fiscal 2020.

Ansell said it saw a surge in demand for protective hand as well as body equipment and affirmed its earnings outlook. The rubber glove maker's shares are gaining more than 19 percent.

In the currency market, the Australian dollar is higher against the U.S. dollar on Monday. The local unit was quoted at $0.6150, compared to $0.6108 on Friday.

The Japanese market is losing more than 4 percent and the safe-haven yen strengthened following the sharp losses on Wall Street Friday amid concerns about the economic impact of the coronavirus pandemic.

The benchmark Nikkei 225 Index is tumbling 781.14 points or 4.03 percent to 18,608.29, after touching a low of 18,578.20 earlier. Japanese stocks rose on Friday amid reports the Japanese government is drawing up a fresh economic package to deal with the impact of the coronavirus outbreak.

Meanwhile, market heavyweight SoftBank is losing more than 8 percent and Fast Retailing is lower by more than 3 percent.

The major exporters are lower on a stronger yen. Panasonic and Mitsubishi Electric are lower by more than 4 percent each, Sony is losing more than 3 percent, and Canon is declining more than 2 percent.

In the tech space, Advantest and Tokyo Electron are tumbling almost 4 percent each.

In the oil sector, Inpex is declining more than 3 percent and Japan Petroleum is lower by almost 3 percent after crude oil prices tumbled almost 5 percent Friday.

Among the major gainers, Fujifilm Holdings is gaining almost 5 percent, Chughai Pharmaceutical is rising more than 4 percent and Ajinomoto is higher by almost 4 percent.

On the flip side, Tokyo Tatemono and Fuji Electric are falling almost 9 percent each, while Taiheiyo Cement and Obayashi Corp. are losing almost 8 percent each.

In the currency market, the U.S. dollar is trading in the lower 107 yen-range on Monday.

Elsewhere in Asia, Indonesia is losing almost 5 percent, Singapore is lower by 4 percent and South Korea is declining almost 2 percent. Shanghai, Hong Kong, Taiwan, Malaysia are down more than 1 percent each, while New Zealand is modestly lower.

On Wall Street, stocks opened lower Friday on profit taking, but staged a recovery attempt in afternoon trading after the House passed the massive $2 trillion stimulus bill designed to respond to the economic fallout from the coronavirus pandemic. However, lingering concerns about the economic impact of the coronavirus also weighed on the markets, as the number of confirmed cases in the U.S. surpassed the number of cases in China or Italy.

The Dow plunged 915.39 points or 4.1 percent to 21,636.78, the Nasdaq tumbled 295.16 points or 3.8 percent to 7,502.38 and the S&P 500 dove 88.60 points or 3.4 percent to 2,541.47.

The major European markets also showed substantial moves back to the downside on Friday. While the U.K.'s FTSE 100 Index plummeted by 5.3 percent, the French CAC 40 Index plunged by 4.2 percent and the German DAX Index tumbled by 3.7 percent.

Crude oil prices fell for a second successive day on Friday, as worries about energy demand outlook outweighed massive stimulus announced by central banks and governments to limit the economic impact of the coronavirus spread. WTI crude for May delivery slumped $1.09 or about 4.8 percent to $21.51 a barrel.

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