- HSBC turns down, is on track to snap two-session winning streak
- Japan gains, as government imposes partial lockdown and readies near-US$1 trillion stimulus; Hong Kong and China see losses
Most Asia-Pacific markets declined Wednesday, as caution drove sentiment after the daily coronavirus death tolls in the US and UK reached their highest levels.
Investors have faced a barrage of coronavirus data, charts and predictions to sort through each day in trying to determine the direction of highly volatile global markets. More than half of the planet's population is under lockdown, and governments and central banks have thrown massive fiscal and monetary stimulus at the virus, which has dragged the world into a recession.
China, after reporting no virus-related deaths Tuesday for the first time since January, said on Wednesday morning that two people have since died. Meanwhile, the US has the most cases in the world and most of its states are under lockdown. However, President Donald Trump's economic adviser told Fox News on Tuesday that the Trump "would like to reopen the economy as soon as he can," possibly in a few weeks.
"Trying to factor in the mix of epidemiology, psychology, and politics is troubling," said Stephen Innes, chief global strategist at AxiCorp.
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"And while we know economic data is missing or poor quality, but if the Covid-19 data proves to be unreliable, then we will be in a world of hurt afloat in a sea of red in a rudderless ship, especially with investors trading on sentiment rather than the economics for now," he said.
The Hang Seng Index widened losses in afternoon trading, with the benchmark posting a 1.3 per cent loss as of 2:50pm local time. That puts it on track to snap a two-day winning streak.
HSBC lost its earlier steam, turning down 0.4 per cent. It has gained the past two sessions following its tumble last week when it cancelled dividends.
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China stocks declined as well, with the Shanghai Composite Index slipping 0.2 per cent. (For in-depth coverage of the Hong Kong and mainland markets, see the Stocks Blog.)
China, where the coronavirus pandemic was first reported, will lead the way out of the global economic downturn after taking extraordinary measures to contain the outbreak, according to Wenli Zheng, portfolio manager at T. Rowe Price.
The firm expects social distancing and work from home arrangements will accelerate many trends that were already playing out, such as the growth of e-commerce, food delivery and other online services.
Meanwhile, oil futures in New York gained, as investors bet Saudi Arabia and Russia can agree to reduce output later this week. The two oil producers set off a price war amid the coronavirus outbreak, which had already significantly weakened demand.
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Elsewhere in the Asia-Pacific region, Japan was a standout, seeing gains as its government launches new approaches to deal with the coronavirus.
Prime Minister Shinzo Abe on Tuesday declared a state of emergency in Tokyo, Osaka and five other prefectures " accounting for about 44 per cent of Japan's population " to contain the coronavirus. The government also approved a record near-US$1 trillion stimulus package for families and business. That is equivalent to 20 per cent of Japan's GDP.
Japan's Nikkei 225 gained 2.1 per cent, building on its 2 per cent rise on Tuesday.
South Korea's Kospi fell 0.9 per cent. It gained 1.8 per cent on Tuesday. On Monday, the benchmark surged 3.9 per cent, technically entering a bull market as it closed 23 per cent above its March 19 low.
The country's tech-heavy Kosdaq inched up 0.1 per cent, after advancing 1.6 per cent on Tuesday.
Australia's ASX 200 slipped 0.9 per cent.
New Zealand's S&P/NZX50 gained 2.3 per cent.
Meanwhile, Singapore's Straits Times Index lost 2 per cent.
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