Japanese and Australian stocks tumbled yesterday at the end of a healthy week across world markets, with traders tracking a sell-off on Wall Street as another huge jump in jobless claims underlined the impact of coronavirus on the global economy.
Investors were also spooked by comments from from Donald Trump indicating he could hit China with further tariffs over its handling of the virus crisis, saying he had seen evidence linking a Wuhan lab to the contagion.
Tokyo’s Nikkei 225 index dropped 2.84%, or 574.34 points, to end at 19,619.35, while the broader Topix index lost 2.24%, or 32.77 points, to 1,431.26.
Sydney fell 5% in its worst performance for a month owing to a combination of concern over the global economic downturn and profit-taking following gains in April. Wellington dropped 0.8%, while the rest of Asia was closed for public holidays.
“We need to be cautious as there have been reports that US President Donald Trump is considering retaliation against China over the new coronavirus,” Okasan Online Securities said in a note.
US markets turned negative after the Labor Department said another 3.8mn US workers filed for unemployment benefits last week, taking the six-week total above 30mn.
That came as data showed the eurozone economy shrunk 3.5% in the first quarter, following a slightly worse performance in the US with expectations that deeper contractions will come in the next three months.
The sell-off comes at the end of a bright week for equities fuelled by signs that coronavirus infections and deaths are easing around the world while governments begin easing lockdown restrictions that have strangled their economies. Oil prices rose, however — with WTI up 2% to add to two days of 25% gains — as massive output cuts began to kick in, while Norway and crude major ConocoPhillips said they would join in turning the taps lower.
Brent rose almost 1%. The risk-off mood also weighed on higher-yielding, riskier currencies, with South Korea’s won and the Australian dollar losing more than 1%, while Mexico’s peso and the South African rand dropped around 3%.
Traders in Tokyo were also watching for news on North Korean leader Kim Jong-un’s health, and reports that the Japanese government will extend a nationwide state of emergency over the coronavirus, Okasan senior strategist Rikiya Takebe said.
Some investors were also trading to adjust their positions ahead of the so-called Golden Week holiday through Wednesday, analysts said.
In Tokyo, some blue-chip exporters were lower, with Toyota falling 2.58% to 6,494 yen and Sony shedding 1.81% to 6,806 yen. Japan Airlines was down 3.22% at 1,877.5 yen after it said late Thursday its annual net profit plunged nearly 65% to 53.4bn yen ($500mn) as the pandemic smashes aviation demand.
Mitsubishi UFJ Financial tumbled 4.4% to 415 yen after it cut its net profit projection for the year to March by 40% from the previous estimate to 520bn yen. The dollar fetched 107.05 yen in Asian trade, against 107.23 yen in New York late Thursday.
from Gulf Times https://ift.tt/2VTRsyP
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