Asian markets dropped Thursday as the economic reality of the coronavirus crisis became even starker, and China-US relations soured, overshadowing recent optimism over the easing of lockdown measures.
With countries from Asia-Pacific to Europe and US states reopening their shattered economies, global equities have enjoyed a strong revival after crashing in March, with oil also getting much-needed support from hopes for a pick-up in demand.
But a slew of monumentally bad data has highlighted the struggle governments face is reigniting economies, with hundreds of millions of people left jobless and countless companies going under or on the brink.
On Wednesday, figures from payrolls firm ADP showed the US private sector lost 20.2 million jobs last month alone, sending shivers through markets, days ahead of the release of a key government report that is forecast to show a historic fall in employment.
Meanwhile, the European Commission forecast the eurozone economy would shrink 7.7 percent this year, while India reported its crucial service sector — which makes up more than half of GDP — collapsed in April.
“Sentiment appears to be shifting lower as the scope of shutdowns and travel restrictions are giving rise to economic uncertainty, which is gradually retaking hold, even more so ahead of what’s bound to be a dreary (US jobs) report on Friday.”AxiCorp’s Stephen Innes
After losses in Europe as well as the Dow and S&P 500 on Wall Street, Asia turned red.
Tokyo, which was returning after an extended holiday weekend, ended the morning 0.2 percent lower, Hong Kong slipped 0.8 percent and Shanghai eased 0.3 percent.
Sydney eased 0.7 percent and Seoul dipped 0.3 percent, though there were gains in Wellington, Taipei and Manila.
“We remain concerned about the potential for the pandemic to have lasting effects on growth,” Ron Temple of Lazard Asset Management said. “Countries and companies are likely to exit the crisis with significantly higher debt, curtailing their ability to invest and innovate.”
Investors are growing increasingly worried about rising tensions between China and the United States after Donald Trump and Secretary of State Mike Pompeo hit out at Beijing’s handling of the pandemic, accusing it of a cover-up.
China has hit back, saying the White House is telling lies for domestic purposes, and the row has fanned worries the economic superpowers will renew their trade war that hammered global markets last year.
The Financial Times, citing officials in Washington, reported that Trump is looking into stepping up sanctions on China with curbs on supply chains and investment flows.
Such moves would endanger a fragile truce between the two sides that was agreed late last year and which brought some stability to the global economy after almost two years of tariff bickering.
OANDA’s Edward Moya added: “Trump expects China to live up to their end of the trade deal and that seems to have no chance of happening because of COVID-19.”
Oil prices edged up after suffering from profit-taking Wednesday, though the market continues to enjoy support from a likely rise in demand as lockdowns ease and people begin to head out again.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 0.2 percent at 19,587.42 (break)
Hong Kong – Hang Seng: DOWN 0.8 percent at 23,956.30
Shanghai – Composite: DOWN 0.3 percent at 2,868.83
West Texas Intermediate: UP 0.9 percent at $24.21 per barrel
Brent North Sea crude: UP 0.5 percent at $29.88 per barrel
Euro/dollar: UP at $1.0802 from $1.0796 at 2100 GMT
Dollar/yen: UP at 106.21 yen from 106.09 yen
Pound/dollar: DOWN at $1.2323 from $1.2337
Euro/pound: UP at 87.65 pence from 87.49 pence
New York – Dow: DOWN 0.9 percent at 23,664.64 (close)
London – FTSE 100: UP 0.1 percent at 5,853.76 (close)
— Bloomberg News contributed to this story —
Thai Mango growers complain of low prices and fewer exports
Because of the global COVID-19 pandemic, their mangoes are not being exported, due to fewer buyers, and their prices have plunged to between 10 and 20 baht per kilogram, depending on size.
Mango orchard owners in Thailand’s northern province of Phitsanuloke are seeking help from the provincial administration to promote the sale of their sweet fruit, particularly Barracuda Mango variety.(more…)
Foreigners’ Participation in Thai Listed Companies explained
Special vehicles have been created to facilitate foreign investors so that they are able to invest in Thai
securities flexibly and conveniently.
Subscribe via Email
3 ways Asia can recover from the COVID-19 pandemic faster
Countries in the East Asia and Pacific region will benefit from cooperation in three major areas: vaccine deployment, reviving sectors...
Thailand’s Vaccine Strategy: What went wrong?
Questions are being asked, and not answered, over the decision to rely almost entirely on Siam Bioscience, a local, palace-owned...
Exclusive interview with Richi Kukreja, HR Lead Director for Zoetis South East Asia
Zoetis is a global animal health industry leader, dedicated to supporting customers and their businesses in ever better ways. Building...
World Bank lowers Thai GDP growth outlook to 2.2%
In the Thailand Economic Monitor released today, the World Bank adjusted its outlook on Thailand’s economic growth this year to...
The Importance of E-Wallets for Online Gaming Sites
With e-wallets and cryptocurrency being the most relevant options, banks have been put on the side burner, especially when e-wallets...