Asian stocks fall after historic Wall Street plunge
TOKYO — Asian shares fell on Tuesday in a topsy-turvy session following one of Wall Street’s biggest one-day routs in history as headlines about the coronavirus outbreak and its global economic impact whiplashed investor sentiment.
Financial markets cratered on Monday with the S&P 500 tumbling 12%, its biggest drop since “Black Monday” three decades ago, as a series of emergency central bank rate cuts globally only added to the recent sense of investor panic.
While some markets such as US stock futures bounced in Asian trade after the major plunge, there were no convincing reasons for a sustained rally.
MSCI’s broadest index of Asia-Pacific shares outside Japan gave up early gains to trade 0.5% lower. Japan’s Nikkei stock index fell 0.06% and South Korea’s KOSPI was off 2.16%. Australian shares were up 2.73% although this followed a plunge of almost 10% on Monday.
“The move in US stock futures prompted some buying of battered down sharers and lifted dollar/yen,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.
“The focus is shifting to the fiscal response to the virus. We’re locked in a pattern where markets bounce and then resume falling.”
US stock futures rose by their daily limit in Asian trading, also driven in part by hopes for big US fiscal spending. This lifted some Asian bourses into positive territory, but the gains did not last.
Some $2.69 trillion in market value was wiped from the S&P 500 on Monday as it suffered its third-largest daily percentage decline on record. Over the past 18 days, the benchmark index has lost $8.28 trillion.
Gold, which is normally bought as a safe-haven, extended declines on Tuesday as some investors chose to sell whatever they could to keep their money in cash.
Oil futures rebounded in Asia, but downside risks remain due to an expected slump in global energy demand and Saudi Arabia’s plans to increase crude output to expand its market share.
The US Federal Reserve stunned investors with another emergency rate cut on Sunday, prompting other central banks to ease policy in the biggest coordinated response since the global financial crisis more than a decade ago.
Investors, however, are worried that central banks may have spent all their ammunition and that more draconian restrictions on personal movement are necessary to contain the global coronavirus outbreak.
Group of Seven finance ministers are likely to hold a call on Tuesday night, which has fueled speculation that a coordinated fiscal response could be in the works. — Reuters
NOTICE
Trading at the Philippine Stock Exchange, as well as clearing and settlement at the Securities Clearing Corporation of the Philippines, are suspended “until further notice” as Luzon is now under “enhanced community quarantine.
