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Asian Shares Mostly Lower Wednesday 04/08 05:43
Japan's benchmark advanced but other Asian shares fell Wednesday amid
uncertainty over the coronavirus outbreak, which continues to claim more lives
around the world.
TOKYO (AP) -- Japan's benchmark advanced but other Asian shares fell
Wednesday amid uncertainty over the coronavirus outbreak, which continues to
claim more lives around the world.
Japan's Nikkei 225 jumped 2.1% to finish at 19,353.24. Stronger than
expected machinery orders helped lift sentiment. Australia's S&P/ASX 200 shed
nearly 0.9% to 5,206.90, while South Korea's Kospi lost 0.3% to 1,817.74. Hong
Kong's Hang Seng fell 1.3% to 23,927.49 and the Shanghai Composite dipped 0.5%
to 2,807.83.
A short-lived rally on Wall Street suddenly vanished in a market dominated
by sharp swings responding to the ups and downs of the news about the pandemic.
"The recent risk rally faded quickly despite recent stimulus efforts from
both monetary and fiscal authorities, with market players coming to terms with
the unabated rise in fatalities as the virus continues to spread," Prakash
Sakpal and Nicholas Mapa, economists at ING, said in a report.
In Asia, Japan's state of emergency kicked in, focused on seven urban areas,
including Tokyo, with strong government requests for people to stay home and
restaurants and stores to close for a month. It was unclear how effective the
entirely voluntary measures would be.
Goldman Sachs said in a report that Japan's economy is headed to a record
25% contraction in the current quarter, with exports diving by 60% in the
April-June period. The contraction for the world's third largest economy would
be a record, since GDP, or gross domestic product, began to be tracked in 1955.
Japan's economic activity will likely recover with the third quarter and GDP
is expected to grow 3.1% in 2021, it said.
The S&P 500 dipped 0.2% to 2,659.41 after erasing a surge of 3.5% earlier in
the day. The market's gains faded as the price of U.S. crude oil abruptly
flipped from a gain to a steep loss of more than 9%.
But on Wednesday, benchmark U.S. crude oil surged $1.18 to $24.81 a barrel
in electronic trading on the New York Mercantile Exchange after President
Donald Trump reiterated in comments to Fox TV that he expects Russia and Saudi
Arabia to resolve their price war. U.S. crude had fallen $2.45, or 9.4%, to
settle at $23.63 per barrel Tuesday.
Brent crude, the international standard, gained 61 cents to $32.48 on
Wednesday.
Even though economists say a punishing recession is inevitable, some
investors have begun to look ahead to when a peak in new infections would offer
some clarity about how long the downturn may last and how deep it will be.
Investors could then, finally, envision the other side of the economic
shutdown, after authorities forced businesses to halt in hopes of slowing the
spread of the virus. In the meantime, governments around the world are talking
about pumping trillions of dollars more of aid for the economy.
Many professional investors say they've been wary of the recent upsurge and
expect more volatility ahead. The S&P 500 has rallied nearly 19% since hitting
a low on March 23, though it's still down 21.5% from its record set in February.
"It's important to remember we shouldn't over-extrapolate temporary trends,"
said Patrick Schaffer, global investment specialist at J.P. Morgan Private Bank.
Such concerns were borne out in Tuesday's trading, when the S&P 500 swung
up, down, up, down and back up again through the day.
"We are still in what you would call the relief rally off of the prior low,"
said Sam Stovall, chief investment strategist at CFRA. He noted that this kind
of a rally is common within deep bear markets, Wall Street-speak for when
stocks decline 20% or more from a peak.
"There's no guarantee that the worst is behind us, yet traders believe that
at least there is some short-term money to be made," Stovall said.
The Dow Jones Industrial Average slipped 0.1% to 22,653.86, giving up an
earlier gain of 937 points. The Nasdaq composite dropped 3%, to 7,887.26.
Experts say more deaths are on the way due to COVID-19, which has already
claimed at least 82,000 lives around the world. The U.S. leads the world in
confirmed cases with nearly 400,000, according to a tally by Johns Hopkins
University.
More economic misery is on the horizon. Economists expect a report on
Thursday to show that 5 million Americans applied for unemployment benefits
last week as layoffs sweep the country. That would bring the total to nearly 15
million over the past three weeks. Analysts also expect big companies in
upcoming weeks to report their worst quarter of profit declines in more than a
decade.
CURRENCIES: The dollar inched up to 108.84 Japanese yen from 108.80 yen
Tuesday. The euro slipped to $1.0836 from $1.0892
(CZ)
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