ASIAN stocks were mixed today after two sessions of sharp gains as investors tempered their optimism about the coronavirus while death tolls were still mounting across the globe.
While the number of Covid-19 hospitalisations seemed to be levelling off in New York state, deaths across the United States jumped by a record of more than 1,800.
Mainland China’s new coronavirus cases also doubled in 24 hours due to infected travellers returning from overseas.
Adding to the uncertainty were wild swings in the oil market, where prices rebounded in Asia after sliding yesterday, leaving traders feeling dizzy.
US crude futures jumped 6.4% to US$25.18 a barrel, having shed 9.4% the session before, while Brent crude added US$1.02 to US$32.89.
The erratic action was mirrored in equities with MSCI’s broadest index of Asia-Pacific shares outside Japan first falling almost 1% before clawing back to be little changed.
Japan’s Nikkei stood out with a rise of 2.3% as the confirmation of a state of emergency led some to buy back hard-hit transport and retail stocks. Shanghai blue chips lost 0.3%.
E-Mini futures for the S&P 500 recovered from an early drop to rise 1%, while EUROSTOXX 50 futures eased 0.3% and FTSE futures 0.5%.
“There is reason to be cautious as this looked to be a relief rally ahead of next week’s start of Q1 earning season and before data reveals the depth of the virus impact,” said analysts at JPMorgan in a note.
“Data shows the recent move higher has been accompanied by short covering and de-risking rather than active risk taking on the long side.”
The S&P 500 had ended yesterday down 0.16%, having been up as much as 3.5% at one stage. The Nasdaq dropped 0.33% and the Dow 0.12%.
After US stock markets closed, President Donald Trump said the United States may be getting to the top of the coronavirus curve.
The Trump administration asked Congress for an additional US$250 bil in emergency economic aid for small US businesses reeling from the pandemic.
“While the virus’ ‘curve is flattening’, the economic effects of the corona crisis will linger for years in our view,” Commonwealth Bank of Australia economist Joseph Capurso said in a note.
Ratings agency S&P Global today warned the cost of combating the virus would weigh heavily on Australia’s finances and changed the outlook for the country’s rating to negative.
That knocked the Aussie dollar down 0.5% to $0.6137 and gave its US peer a lift. The US dollar added 0.2% on the yen to 108.93, while the euro dipped 0.2% to $1.0865.
Against a basket of currencies, the dollar edged up 0.2% to 100.170.
Gold prices were stuck at US$1,648, after touching a 3-1/2-week high yesterday at US$1,671. – April 8, 2020, Reuters
