Asian Markets Mostly Higher
Asian stock markets are mostly higher on Monday, with some of the markets recovering after a weak start despite worries about the rapid spread of the coronavirus and its impact on the global economy. The U.S., Australia and Thailand have all reported the first coronavirus-related deaths, while data released over the weekend showing weak factory activity in China raised fears of a global recession.
However, investors are now increasingly optimistic that major central banks will cut interest rates to support the global economy. Federal Reserve Chairman Jerome Powell said the central bank will “act as appropriate to support the economy” amid the evolving risks posed by the coronavirus outbreak.
The Australian market is extending losses to a seventh trading session amid worries about the rapid spread of the coronavirus around the world. In addition, data released over the weekend showed that factory activity in China fell in February to the lowest level on record.
The benchmark S&P/ASX 200 Index is losing 166.90 points or 2.59 percent to 6,274.30, after touching a low of 6,253.90 earlier. The broader All Ordinaries Index is lower by 179.70 points or 2.76 percent to 6,331.80. Australian stocks fell for a sixth day on Friday.
Among the major miners, Fortescue Metals is falling almost 5 percent, while BHP and Rio Tinto are losing more than 3 percent.
Gold miners are also lower after safe-haven gold prices extended losses to a fourth session. Evolution Mining is falling almost 4 percent and Newcrest Mining is declining more than 1 percent.
In the banking space, National Australia Bank is losing more than 4 percent, while ANZ Banking, Westpac and Commonwealth Bank are tumbling in a range of 3.2 percent to 3.7 percent.
Oil stocks are weak after crude oil prices fell to a fourteen-month low on Friday. Oil Search and Woodside Petroleum are lower by more than 2 percent each, while Santos is declining almost 1 percent.
Bega Cheese said its statutory profit for the first half surged 71 percent from last year on higher revenues, but cut its interim dividend. The dairy goods manufacturer’s shares are lower by more than 4 percent.
Caltex Australia said it has rejected a takeover offer from Britain’s EG Group, but wants to continue talks regarding a sale. The refinery and petrol station owner’s shares are declining more than 3 percent.
On the economic front, Australia will see February numbers for the Performance of Manufacturing Index from AiG, the inflation forecast from TD Securities, job ads from ANZ and the commodity index from ANZ – as well as Q4 figures for company operating profits and inventories.
In the currency market, the Australian dollar is lower against the U.S. dollar on Monday. The local unit was quoted at $0.6516, compared to $0.6522 on Friday.
The Japanese market opened sharply lower amid fears about the rapid spread of the coronavirus across the globe. However, the market has recovered and is now in positive territory amid optimism that major central banks will cut interest rates to support the global economy.
The benchmark Nikkei 225 Index is advancing 143.73 points or 0.68 percent to 21,286.69, after falling to a low of 20,834.29 earlier. Japanese stocks ended lower for a fifth straight session on Friday.
Market heavyweight SoftBank is adding 0.5 percent, while Fast Retailing is declining almost 1 percent. In the tech space, Advantest is rising more than 2 percent and Tokyo Electron is advancing more than 1 percent.
The major exporters are mostly lower on a stronger safe-haven yen. Mitsubishi Electric is declining more than 1 percent, Panasonic is down 0.6 percent and Canon is lower by 0.3 percent, while Sony is advancing 2 percent.
Among auto stocks, Honda Motor is losing almost 2 percent and Toyota Motor is declining more than 1 percent. In the oil sector, Inpex is lower by more than 1 percent and Japan Petroleum is edging down 0.1 percent each after crude oil prices fell to a fourteen-month low on Friday.
Among the major gainers, Unitika is rising more than 3 percent, while Sumco Corp., Bandai Namco Holdings and M3 are higher by more than 2 percent each.
On the flip side, Mitsui Mining & Smelting is losing almost 5 percent, while Chugai Pharmaceutical and Taiheiyo Cement are lower by more than 4 percent each.
In economic news, Japan will release fourth-quarter numbers for capital spending and company profits as well as final February numbers for the manufacturing PMI from Nikkei.
In the currency market, the U.S. dollar is trading in the upper 107 yen-range on Monday.
Elsewhere in Asia, Shanghai is rising more than 2 percent, South Korea is advancing more than 1 percent and Hong Kong is adding almost 1 percent, while Singapore and Indonesia are also higher. New Zealand, Malaysia and Taiwan are lower.
On Wall Street, stocks fluctuated on Friday after experiencing yet another sell-off early in the session. Stocks regained some ground late in the session after Federal Reserve Chairman Jerome Powell said the central bank will “act as appropriate to support the economy” amid the evolving risks posed by the coronavirus outbreak. Escalating concerns about the outbreak continued to weigh on the markets, however, as the disease continues to spread across the globe.
While the Nasdaq inched up 0.89 points or less than a tenth of a percent to 8,567.37, the Dow tumbled 357.28 points or 1.4 percent to a nearly nine-month closing low of 25,409.36 and the S&P 500 slid 24.54 points or 0.8 percent to a four-month closing low of 2,954.22.
The major European markets also showed substantial moves to the downside on Friday. While the German DAX Index plummeted by 3.9 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index tumbled by 3.4 percent and 3.2 percent, respectively.
Crude oil prices fell sharply to a 14-month low on Friday as growing concerns about energy demand due to the impact of the fast-spreading coronavirus on the global economy weighed on the commodity once again. WTI crude for April ended down $2.33 or about 5 percent at $44.76 a barrel, the lowest settlement since end December 2018.
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