TOKYO (AP) – Global shares skidded yesterday as reports of rising numbers of coronavirus cases deepened the gloom over the likely impact on the world economy.
France’s CAC 40 slipped 3.6 per cent to 4,241.02 in early trading, while Germany’s DAX shed 2.9 per cent to 9,648.42. Britain’s FTSE 100 plunged 3.9 per cent to 5,450.63 after major banks announced they were scrapping dividend payments, bringing their share prices sharply lower.
United States (US) shares were set to drift lower with Dow futures down 3.2 per cent at 21,070.50. S&P 500 futures dipped 3.4 per cent to 2,496.97.
Japan’s benchmark Nikkei 225 dropped 4.5 per cent to finish at 18,065.41.
The Bank of Japan’s quarterly survey, or tankan, showed sentiment among Japan’s large manufacturers fell in the January-March period, marking the fifth straight quarter of decline, according to the central bank. The tankan measures corporate sentiment by subtracting the number of companies saying business conditions are negative from those responding they are positive.
Australia’s S&P/ASX 200 added 3.6 per cent to 5,258.60, while South Korea’s Kospi dipped 3.9 per cent to 1,685.46. Hong Kong’s Hang Seng lost 2.2 per cent to 23,085.79, while the Shanghai Composite edged 0.6 per cent lower to 2,734.52.
India’s Sensex fell 4.7 per cent. Shares also fell in Singapore, Malaysia, Indonesia and Thailand. On Wall Street overnight, stocks plunged, closing out their worst quarter since late 2008, when the S&P 500 lost 22.6 per cent.
The surge of coronavirus cases around the world has sent markets to breathtaking drops since mid-February, undercutting what had been a good start to the year. The virus outbreak abruptly put the clamps on the economy. Benchmark US crude oil dropped by roughly two thirds in January-March amid expectations for weaker demand.
With the number of infections still rising in most regions, “If anything, the worst is yet to come, and some of the world’s largest emerging markets are still to feel the full onslaught of COVID-19,” said Senior Market Analyst with Oanda Jeffrey Halley.
Markets have cut their losses in recent weeks on hopes that massive aid from governments and central banks around the world can blunt the blow. The S&P 500 was down nearly 31 per cent for the quarter at one point, but it has climbed 15.5 per cent since last Monday.
The Fed has promised to buy as many Treasurys as it takes to get lending markets working smoothly after trading got snarled in markets that help companies borrow short-term cash to make payroll, homebuyers get mortgages and local governments to build infrastructure.
Congress, meanwhile, approved a USD2.2 trillion rescue plan for the economy, and leaders are already discussing the possibility of another round of aid. Among the next milestones for investors is tomorrow’s US jobs report, which will likely show a sharp drop in payrolls. Companies soon will begin reporting their earnings results for the first quarter. Analysts are looking for the steepest drop in profits since early 2016, according to FactSet.
The numbers may get even worse in this quarter.
The number of known coronavirus cases keeps rising, and the worldwide tally has topped 860,000, according to Johns Hopkins University. The US has the highest number in the world: more than 189,000 people.
Most people who contract COVID-19 have mild or moderate symptoms, which can include fever and cough. But others, especially older adults and people with existing health problems may get pneumonia and need to be hospitalised. More than 42,000 people have died worldwide due to COVID-19, while more than 178,000 have recovered.
ENERGY: US benchmark crude fell 26 cents to USD20.22 a barrel in electronic trading on the New York Mercantile Exchange. It gained 39 cents to USD20.48 a barrel on Tuesday. Brent crude, the international standard, lost USD1.24 to USD25.11 per barrel.
CURRENCIES: The dollar cost JPY107.67, up from JPY107.52 on Tuesday. The euro fell to USD1.0944 from USD1.1034.