Asian Markets Mostly Lower After Wall Street Sell-off

asiancommentary jan23 01apr20

Asian stock markets are mixed on Thursday following the overnight sell-off on Wall Street amid worries about the rising death toll and the economic impact from the coronavirus pandemic. White House officials have warned of nearly a quarter million deaths in the U.S. from COVID-19.

The Australian market is notably lower following the sell-off on Wall Street.

The benchmark S&P/ASX 200 Index is losing 128.00 points or 2.43 percent to 5,130.60, after falling to a low of 5,065.20 earlier. The broader All Ordinaries Index is lower by 123.00 points or 2.32 percent to 5,167.70. Australian stocks posted strong gains on Wednesday.

Among the big four banks, National Australia Bank and ANZ Banking are losing more than 5 percent each, while Westpac and Commonwealth Bank are lower by more than 4 percent each.

Westpac said it has appointed Peter King as its new CEO. King was named as interim CEO in November 2019, after former chief executive Brian Hartzer stepped down amid the bank's money laundering and child exploitation scandal.

Commonwealth Bank said it will make a one-time payment to all customers who are receiving a home loan deferral due to the coronavirus.

Insurance stocks are also notably lower. Suncorp Group is falling more than 8 percent, QBE Insurance is tumbling more than 6 percent, and Insurance Australia Group is losing more than 4 percent.

In the mining space, Fortescue Metals is losing almost 4 percent, while Rio Tinto and BHP are declining more than 2 percent each after metal prices declined amid falling demand.

In the oil sector, Santos is higher by more than 3 percent, Oil Search is rising almost 3 percent and Woodside Petroleum is advancing more than 1 percent as crude oil prices gained in Asian trading after declining overnight.

Among gold miners, Evolution Mining is gaining almost 7 percent and Newcrest Mining is adding more than 2 percent as safe-haven gold prices rose in Asian trading.

On the economic front, Australia will see February figures for job vacancies today.

In the currency market, the Australian dollar is higher against the U.S. dollar on Thursday. The local unit was quoted at $0.6086, compared to $0.6080 on Wednesday.

The Japanese market is extending losses from the previous session and the safe-haven yen strengthened following the overnight sell-off on Wall Street.

Worries about the rising number of COVID-19 infections in Tokyo and uncertainty about the timing of a lockdown in the Japanese capital city also weighed on sentiment.

The benchmark Nikkei 225 Index is losing 312.36 points or 1.73 percent to 17,753.05, after touching a low of 17,707.66 earlier. Japanese stocks closed sharply lower on Wednesday.

Market heavyweight SoftBank is down 0.2 percent, while Fast Retailing is losing more than 4 percent.

The major exporters are mostly lower on a stronger yen. Panasonic is lower by more than 2 percent, while Canon and Mitsubishi Electric are declining almost 2 percent each. Sony is adding 0.5 percent.

In the tech space, Advantest is losing more than 4 percent and Tokyo Electron is lower by 3 percent.

In the oil sector, Japan Petroleum is advancing almost 1 percent and Inpex is adding 0.2 percent as crude oil prices rebounded in Asian trading.

Among the other major gainers, Sompo Holdings is rising more than 3 percent and Kubota Corp. is higher by almost 3 percent. Yamato Holdings, NTT Docomo and Tokio Marine are advancing more than 2 percent each.

On the flip side, Credit Saison and Isuzu Motors are tumbling more than 7 percent each, while Tokyu Fudosan, J Front Retailing and Subaru Corp. are losing more than 5 percent each.

Subaru said Wednesday that it will halt all its global auto production for about three weeks due to the spread of the novel coronavirus.

On the economic front, the Bank of Japan said that the monetary base in Japan was up 2.8 percent on year in March, coming in at 507.848 trillion yen. That follows the 3.6 increase in February.

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

Elsewhere in Asia, Singapore and New Zealand are declining more than 1 percent each, while Hong Kong and Taiwan are also lower. Meanwhile, South Korea is advancing more than 1 percent. Shanghai, Indonesia and Malaysia are higher.

On Wall Street, stocks closed sharply lower on Wednesday amid renewed coronavirus concerns after White House officials warned of nearly a quarter million deaths from the pandemic. During a White House press conference on Tuesday, President Donald Trump warned the U.S. is facing a "very, very painful two weeks." White House officials are now projecting between 100,000 and 240,000 deaths in the U.S. as a result of the outbreak, which Trump previously sought to downplay.

The Dow plummeted 973.65 points or 4.4 percent to 20,943.51, the Nasdaq tumbled 339.52 points or 4.4 percent to 7,360.58 and the S&P 500 plunged 114.06 points or 4.4 percent to 2,470.50.

The major European markets also showed significant moves to the downside on Wednesday. The French CAC 40 Index plunged by 4.3 percent, while the German DAX Index and the U.K.'s FTSE 100 Index tanked by 3.9 percent and 3.8 percent, respectively.

Crude oil prices drifted lower after early gains on Wednesday, as official data showed crude stockpiles in the U.S. rose for a tenth successive week. WTI crude for May ended down $0.17 or about 0.8 percent at $20.31 a barrel.

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