Stocks Slump As US-China Tensions Heat Up

A woman walks past a screen showing information and the index of the Taipei Stock Exchange on July 24, 2020. Sam Yeh / AFP
A woman walks past a screen showing information and the index of the Taipei Stock Exchange on July 24, 2020. Sam Yeh / AFP

 

Global equities took a beating Friday as China-US tensions intensified, while stalled stimulus talks in Washington fuelled fears for the economy, traders said.

Lingering worries about the impact on businesses of fresh coronavirus outbreaks helped trigger major profit-taking, overshadowing a batch of bright data in Europe.

“It’s a sour end to the trading week,” said AJ Bell investment director Russ Mould.

The Dow was down nearly 140 points approaching midday in New York, “adding to yesterday’s declines in morning action as friction between the US and China heated up overnight”, said Charles Schwab analysts.

European indices were up to two percent lower at the close.

Earlier in Asia, Shanghai and Hong Kong had already dived as relations between the world’s two superpowers took another bad turn when China ordered the closure of the US consulate in Chengdu in retaliation for America shuttering Beijing’s diplomatic mission in Houston this week.

File photo: Traders work on the floor of the New York Stock Exchange (NYSE) on January 27, 2020 in New York City.  Spencer Platt/Getty Images/AFP

 

The standoff is the latest in a string of issues — including Hong Kong, coronavirus and Huawei — that have plunged relations between the superpowers into crisis.

Stock markets were also still reeling from Thursday’s report of a rise in new jobless claims in the US which prompted doubts about any ongoing economic rebound there, traders reported.

Hopes that the data would spur US lawmakers to push on with fresh stimulus measures were undermined by the inability of Republicans and the White House to agree on a $1.0 trillion stimulus proposal.

Haven asset gold meanwhile jumped within spitting distance of $1,900 for the first time since late 2011, boosted by economic uncertainty, geopolitical tensions and Federal Reserve monetary easing that has weakened the dollar.

Oil attempted to stage a rebound having tanked Thursday, but then investors lost heart, overwhelmed by demand worries, and pushed crude lower again.

Key figures around 1540 GMT

London – FTSE 100: DOWN 1.4 percent at 6,123.77 points (close)

Frankfurt – DAX 30: DOWN 2.0 percent at 12,838.06 (close)

Paris – CAC 40: DOWN 1.5 percent at 4,956.43 (close)

EURO STOXX 50: DOWN 1.8 percent at 3,310.89

New York – Dow: DOWN 0.5 percent at 26,519.43

Hong Kong – Hang Seng: DOWN 2.2 percent at 24,705.33 (close)

Shanghai – Composite: DOWN 3.9 percent at 3,196.77 (close)

Tokyo – Nikkei 225: Closed for a holiday

Euro/dollar: UP at $1.1633 from $1.1596 at 2100 GMT

Dollar/yen: DOWN at 105.82 yen from 106.86 yen

Pound/dollar: UP at $1.2786 from $1.2741

Euro/pound: DOWN at 90.97 pence from 91.02

West Texas Intermediate: DOWN 0.2 percent at $40.97 per barrel

Brent North Sea crude: DOWN 0.4 percent at $43.15

 

 

AFP

Stocks Drop As COVID-19 Cases Spike Globally

A woman wearing a face mask walks past a stocks display board outside Exchange Square in Hong Kong on July 16, 2020, as the city experiences another spike in COVID-19 coronavirus cases. Anthony WALLACE / AFP
A woman wearing a face mask walks past a stocks display board outside Exchange Square in Hong Kong on July 16, 2020, as the city experiences another spike in COVID-19 coronavirus cases. Anthony WALLACE / AFP

 

Most equities fell Monday as a spike in new coronavirus infections across the planet forced governments to impose fresh containment measures, fuelling fears about the stuttering economic recovery.

Traders are also keeping tabs on Europe, where leaders are struggling to unite over an $860 billion rescue package for the battered European Union.

The rally that has characterised equity markets since hitting a March low is showing signs of stalling as the pandemic rages, with new infections from Australia to the United States.

The spikes — Hong Kong saw a record rise Sunday, while Florida’s has been described as “out of control” — have led leaders to unveil new measures to curb the disease’s spread, including closing bars and restaurants and making masks compulsory.

That has raised questions about the pace of the global economy’s recovery from an expected recession this year.

An index of US consumer sentiment last week showed it hit a three-month low in July.

“When coupled with the recent stickiness of jobless claims, the Michigan survey suggests some risk that the positive data surprises that dominated through June might have hit a brick wall,” said AxiCorp’s Stephen Innes.

Shane Oliver, of AMP Capital Investors, added: “Our base case remains for the economic recovery to continue, but for the deep V rebound evident in much recent data to give way to a slower, bumpier recovery going forward.

“Shares are still vulnerable to a further correction or consolidation, with renewed lockdowns and the US presidential election being the main risks.”

Investors are keeping an eye on Washington, hoping lawmakers will press ahead with fresh stimulus measures for the world’s top economy, with unemployment benefit bonus payments due to expire on July 31.

However, there are disagreements over how much to pay and Donald Trump is trying to include tax cuts. Failure to extend the scheme would have a catastrophic impact on poor families.

“Depending on how ugly or not the bipartisanship becomes, this story has the potential to move markets later in the week,” said Jeffrey Halley at OANDA.

“Discussions are taking on more urgency as COVID-19 continues its rampage across the Southern and Western United States. Enhanced shutdowns are now a genuine possibility as the US failed to emerge from even the first wave of the pandemic.”

EU stimulus deadlock

Shanghai jumped more than three percent, resuming a rally that saw the composite index jump around 15 percent in the first two weeks of July before a sharp drop last week.

Tokyo rose 0.1 percent after reversing early losses, while there were also gains in Mumbai and Manila.

But Hong Kong dropped 0.1 percent, and Sydney, Singapore and Jakarta slipped 0.5 percent. Wellington gave back 0.3 percent, while Taipei, Bangkok and Seoul were also in the red.

The corporate earnings season continues this week, with observers looking for companies’ commentaries, seeking clues about their outlooks.

“These are the folks who genuinely have their fingers on the economy’s pulse and can tell us with no uncertainty about underlying business trends and how those changes in consumer consumption patterns could ultimately drive stock market capital reallocations over time,” said Innes.

European leaders remain unable to break a deadlock on their planned stimulus programme, with a fraught summit going into a fourth day.

The talks have failed to yield agreement over the size and rules for the package of loans and grants to help drag Europe out of recession, with the Netherlands, Sweden, Austria, Denmark, and Finland wanting to pare it back and impose strict rules on how it is used.

Still, analysts expect a deal to eventually be hammered out.

“This is the pattern of negotiations and treaties in Europe, where European leaders really argue until the last minute before arriving to a consensus and a package,” Mathieu Savary, of BCA Research, told Bloomberg TV.

“We do not think that the absence of an agreement this weekend, at least so far until now, is the death knell of an agreement.”

The euro bounced back against the dollar after initially dropping at the start of trade, though shares in London, Frankfurt, and Paris all fell.

 

Key figures around 0810 GMT

Tokyo – Nikkei 225: UP 0.1 percent at 22,717.48 (close)

Hong Kong – Hang Seng: DOWN 0.1 percent at 25,057.99 (close)

Shanghai – Composite: UP 3.1 percent at 3,314.15 (close)

London – FTSE 100: DOWN 1.0 percent at 6,230.09

West Texas Intermediate: DOWN 0.7 percent at $40.29 per barrel

Brent North Sea crude: DOWN 0.7 percent at $42.83 per barrel

Euro/dollar: UP at $1.1448 from $1.1435 at 2100 GMT

Dollar/yen: UP at 107.23 yen from 106.93 yen

Pound/dollar: UP at $1.2570 from $1.2568

Euro/pound: UP at 91.01 pence from 90.97 pence

New York – Dow: DOWN 0.2 percent at 26,671.95 (close)

 

 

AFP

Markets Mostly In Reverse After Latest Stocks Surge

A currency dealer monitors exchange rates in a trading room at the KEB Hana Bank in Seoul on October 12, 2018. Asia’s main stock markets traded lower on October 12, but losses were relatively muted as investors took a breather after a global rout sparked by fears over higher US interest rates. Jung Yeon-je / AFP.

 

Asian markets mostly fell Tuesday as traders took a step back after their latest rally, with a run of upbeat economic data offset by fears over a spike in new virus infections.

While several countries are suffering a fresh surge in infections — particularly the United States — the ongoing easing of lockdown measures and reopening of economies has been the key driver of a months-long surge across equities.

After the latest advances, which saw Shanghai hit a two-year high and the Nasdaq on Wall Street end at another record, dealers stepped back and took profits.

There was also some trepidation on trading floors after Donald Trump’s top infectious diseases expert warned the US was still “knee-deep” in its first wave of coronavirus infections.

Anthony Fauci said the country was in “a serious situation that we have to address immediately”.

That came as several states reported new daily records for new cases, with some reimposing lockdowns.

On Tuesday, Australian authorities said more than five million residents of Melbourne, the country’s second-biggest city, will be locked down for six weeks after virus cases surged.

Hong Kong shed 1.4 percent after climbing more than eight percent over the previous four trading days, while Tokyo, Seoul, Singapore, Taipei and Manila were also in negative territory.

Sydney and Jakarta were flat, while London, Paris and Frankfurt were all down in the morning as the European Union forecast a massive contraction in the eurozone economy this year.

But Shanghai rose 0.4 percent, having surged almost six percent Monday as retail investors piled back into the market.

Observers also pointed to an editorial in the China Securities Times on Monday that said fostering a “bull market” after the virus crisis was crucial to kick-starting the world’s number two economy.

The composite index has risen more than 10 percent in just over a week, though there are worries about another bubble similar to the one that burst four years ago and sparked a global rout.

– More gains to come? –

“China’s army of retail investors seem to be perfectly able to look through the worrying Western media headlines of another global coronavirus record,” said AxiCorp’s Stephen Innes.

“Instead, they are listening to the enthusiastic chorus from the nation’s influential state media, which are universally singing bullish from the same song page.”

He cited reports saying there had been a recent surge in new brokerage account openings.

Wellington, Mumbai and Bangkok also rose.

Traders have for weeks been trying to balance the reopening of economies with worries about the disease as it continues its march across the planet.

On Monday there was more positive data, with an index of the US service sector — which makes up the vast majority of the economy — seeing its biggest-ever jump in June to beat forecasts.

“Investors have recognised that as bad as the economy in the US is, it’s not as bad as what people thought it would look like in March and April,” said Nancy Prial at Essex Investment Management.

“The market has started to sense we might see better-than-anticipated results fairly broadly across a wide spread of companies.”

In a sign that the reporting season could be positive, Samsung Electronics said Tuesday it expects to see operating profit jump 23 percent in the second quarter, which is much better than the single-digit fall that analysts had forecast.

The firm appears to have benefited as lockdowns boosted its chip business with data centres moving to stockpile DRAM chips to meet surging demand for online activities.

– Key figures around 0810 GMT –

Tokyo – Nikkei 225: DOWN 0.4 percent at 22,614.69 (close)

Hong Kong – Hang Seng: DOWN 1.4 percent at 25,975.66 (close)

Shanghai – Composite: UP 0.4 percent at 2,245.34 (close)

London – FTSE 100: DOWN 0.8 percent at 6,234.63

West Texas Intermediate: DOWN 1.4 percent at $40.07 per barrel

Brent North Sea crude: DOWN 1.2 percent at $42.58

Euro/dollar: DOWN at $1.1285 from $1.1308 at 2100 GMT

Dollar/yen: UP at 107.57 yen from 107.39 yen

Pound/dollar: DOWN at $1.2480 from $1.2489

Euro/pound: DOWN at 90.44 pence from 90.53 pence

New York – Dow: UP 1.8 percent at 26,287.03 (close)

AFP

Stocks Rally As Restrictions Ease And Death Rates Drop

An Investor (not shown) looks at screens showing stock market movements at a securities company in Beijing on August 26, 2019. WANG Zhao / AFP.

 

Asian equity markets rallied Monday as traders looked past a staggering jump in US job losses to focus on governments easing virus lockdown measures and data showing death rates falling in some of the worst-hit countries.

Observers warned, however, that with the outlook still murky, traders could be getting ahead of themselves — while there are concerns of a second wave hitting South Korea and China, which had been slowly reopening their economies.

Official figures on Friday showed a record 20.5 million people were laid off in the US in April, sending unemployment soaring to 14.7 percent, the highest since the Great Depression.

However, the reading was slightly lower than forecasts and Wall Street ended a healthy week with strong gains as focus turned to plans to lift restrictions that have kept billions of people stuck at home for months in the US and the rest of the world.

“There is hope within this labyrinth of statistical perversity,” said AxiCorp’s Stephen Innes.

“The vast majority of job losers anticipate being recalled. Temporary layoffs on this scale have never happened — like almost every data point in this jobs report — and the hope is that it leads to a rather rapid return to work.”

Tokyo, Hong Kong, Sydney and Taipei all ended up more than one percent.

Jakarta, Bangkok and Mumbai also put on more than one percent in the afternoon, and there were also gains in Singapore and Wellington — though Seoul lost 0.5 percent.

READ ALSO: China’s Ground Zero Reports COVID-19 Infections

Shanghai gave up early gains to end marginally lower despite a pledge by the People’s Bank of China to “more powerful” policies to support the world’s number two economy.

In early trade, London, Paris and Frankfurt posted gains.

However, Sri Lanka’s stock market closed within seconds of reopening following a seven-week trading halt, having tumbled more than 10 percent.

Traders took heart in figures out of badly hit countries including France, Germany and the US showing death rates continuing to sink, while leaders ease up on restrictions put in place to stop the disease’s spread.

There is, however, the ever-present fear of another bout of infections.

South Korea, which had been praised for the handling of its initial outbreak, has been forced to shut all bars and clubs in Seoul after a cluster of new cases, while China on Monday reported the first new infections in over a month in Wuhan, where the outbreak started.

In Germany, at least one district had to reimpose restrictions after an outbreak at a meat processing plant. The latest data out of the country indicated the infection rate was rising again.

– Fears of second wave –

OANDA’s Jeffrey Halley, however, said markets would not likely be hit by such news just yet.

“Markets will likely ignore the threat of COVID-19 part two, staying with the momentum of the peak-virus trade,” he said in a note.

Tapas Strickland, of National Australia Bank, remained upbeat as economies grind back to life after months of near standstill.

“A sharp pick-up in economic activity is being priced by markets, and should occur as long as there is no second wave of infections that necessitates the re-implementation of containment measures,” he said.

“Markets are thus likely to be increasingly sensitive to the track of new COVID-19 cases in countries that have begun to ease restrictions. Progress on a vaccine/effective treatment would also be a game changer.”

The improving sentiment lifted high-yielding, riskier currencies against the dollar, with the South Korean won, South African rand and Australian dollar among the best performers.

But, with markets having soared from their March lows, there are concerns the rally may have run too far considering the uncertainty about how quickly economies can bounce back.

Bob Baur at Principal Global Investors LLC said: “Because so much future growth and uptrend potential is priced in, we expect a period of relapse and consolidation through June.”

Oil prices slipped on profit-taking after surging last week on hopes for a pick-up in demand and as inventories begin to fall and producers slash output.

“While price action is bound to be choppy as economies try to move out of lockdowns, it is probably safe to say that traders have planked a base on oil prices,” added Innes. “Oil fundamentals are showings signs of improvement by the week.”

– Key figures around 0810 GMT –

Tokyo – Nikkei 225: UP 1.1 percent at 20,390.66 (close)

Hong Kong – Hang Seng: UP 1.5 percent at 24,602.06 (close)

Shanghai – Composite: FLAT at 2,894.80 (close)

London – FTSE 100: UP 1.0 percent at 5,996.85

West Texas Intermediate: DOWN 1.9 percent at $24.26 per barrel

Brent North Sea crude: DOWN 1.9 percent at $30.38 per barrel

Euro/dollar: UP at $1.0833 from $1.0836 at 2040 GMT on Friday

Dollar/yen: UP at 107.21 yen from 106.73 yen

Pound/dollar: DOWN at $1.2387 from $1.2402

Euro/pound: UP at 87.45 pence from 87.34 pence

New York – Dow: UP 1.9 percent at 24,331.32 (close).

AFP

Stocks Advance As COVID-19 Restrictions Are Eased

WANG Zhao / AFP.

 

Most equities rose again on Wednesday as investors grew increasingly, but cautiously, hopeful that the worst of the coronavirus had passed and as countries begin to slowly open up from lockdown.

While a string of data highlighted the calamity visited upon the global economy by COVID-19, a slowdown in both infections and deaths in some nations is allowing them to ease restrictions that have kept half the planet stuck at home.

Federal Reserve Vice Chairman Richard Clarida provided an upbeat outlook, saying the US economy could see positive growth in the second half of the year, though tempered that by saying it was dependent on containment of the virus.

“Risk sentiment continues to be buoyed on news of more countries/states rolling back containment measures, followed by reports of more companies re-opening operations,” said Tapas Strickland of National Australia Bank.

“That is giving hope that rollback will allow economic activity to resume and that we may be passed the trough in economic activity.”

Hong Kong and Seoul rose more than one percent, while Shanghai put on 0.6 percent and Wellington added 0.8 percent. Taipei was flat but Sydney slipped slightly.

Singapore put on one percent, with Singapore Airlines surging as much as 21 percent at one point on hopes for a pick-up in business thanks to the easing lockdown measures. It pared the gains to sit around 10 percent higher in late trade.

In early trade, London was slightly higher but Paris and Frankfurt were slightly lower.

Mumbai soared more than one percent on stimulus hopes following data showing India’s factory and services activity collapsed in April.

The services purchasing managers index crashed 43.9 points to 5.4 in April — putting it in single digits for the first time — according to IHS Markit.

Anything below 50 in the gauge points to contraction and with the sector making up more than half of India’s gross domestic product, the group warned the economy likely shrunk 15 percent in the month.

– Fears of jobs horror show –

Fears of a second virus wave as the lockdown eases were keeping traders on their toes.

“It is absolutely dependent on what happens with respect to infection rates and whether there is the so-called second wave,” Andrew Wilson, at Goldman Sachs Asset Management, told Bloomberg TV.

“So as we ease these lockdowns there remains the risk that of course you then have to tighten up the controls. That’s why governments around the world are going to be relatively cautious about how they ease these lockdowns.”

Observers are also keeping tabs on China-US relations after President Donald Trump hit out at Beijing over its handling of the pandemic, sparking fears of a renewal of the economic superpowers’ trade war that hit markets last year.

“Worries that China could retaliate against the US virus and trade accusations are real,” said OANDA’s Jeffrey Halley. “If anything can undermine a peak virus rally, a US-China trade war would do the job nicely.”

Friday sees the much-anticipated release of US jobs data for April, with consensus forecasts that unemployment has surged to an incredible 16.2 percent — the highest since 1948 — from 4.4 percent. However, some economists expect it to rise even higher.

Oil markets were flat, having doubled since last Tuesday fuelled by hopes that demand will begin to pick up as people start going back out and start spending after the long-running lockdown in key economies.

“With economies reopening around the world and the market rebalancing in full swing, traders are positioning for a multi-staged pick-up in demand initially led by gasoline demand at the pump as consumers emerge from lockdowns,” said AxiCorp’s Stephen Innes.

He pointed out that as China emerges from its lockdown, figures showed traffic in the country’s big cities was higher than pre-virus levels, suggesting people were opting for private travel rather than public transport, which would be good for petrol demand.

– Key figures around 0810 GMT –

Hong Kong – Hang Seng: UP 1.1 percent at 24,137.48 (close)

Shanghai – Composite: UP 0.6 percent at 2,878.14 (close)

Tokyo – Nikkei 225: Closed for a holiday

London – FTSE 100: UP 0.1 percent at 5,857.02

West Texas Intermediate: DOWN 0.7 percent at $24.39 per barrel

Brent North Sea crude: UP 0.1 percent at $31.00 per barrel

Euro/dollar: DOWN at $1.0830 from $1.0834 at 2045 GMT

Dollar/yen: DOWN at 106.29 yen from 106.53 yen

Pound/dollar: DOWN at $1.2434 from $1.2435

Euro/pound: DOWN at 87.09 pence from 87.11 pence

New York – Dow: UP 0.6 percent at 23,883.09 (close).

 

European Equities Rebound At Open

 

Europe’s stock markets rallied in opening deals on Thursday, despite losses elsewhere, as investors focused on plans to ease coronavirus lockdown restrictions in several nations.

In initial deals, London’s benchmark FTSE 100 index of major blue-chip companies was up 1.0 percent to 5,653.72 points.

In the eurozone, Frankfurt’s DAX added 1.3 percent to 10,411.56 points and the Paris CAC 40 advanced 1.4 percent to 4,412.62.

Milan’s FTSE Mib jumped 2.1 percent to 17,067.98 and Madrid’s IBEX 35 gained 1.3 percent to 6,927.10 points

“Investors are shrugging off the pessimism and (are) willing to focus on more positive things,” said AvaTrade analyst Naeem Aslam.

“Germany has drawn (up) a plan to ease off the lockdown restrictions and traders are optimistic about this development.

READ ALSO: IMF Cautions Renewed Social Unrest Amid COVID-19 Pandemic

“Having said this, European markets are not trading higher with bigger margins, we are only seeing some small gains, and it is likely that as trading resumes, these small gains may disappear because of the selling pressure on the energy sector.”

With oil prices at near-decade lows, the energy majors have suffered badly.

AFP

Coronavirus Forces Global Markets To Dip

Traders work in the S&P options pit near the close of trading on the Cboe Global Markets trading floor on January 31, 2020 in Chicago, Illinois. Scott Olson/Getty Images/AFP
Traders work in the S&P options pit near the close of trading on the Cboe Global Markets trading floor on January 31, 2020 in Chicago, Illinois. Scott Olson/Getty Images/AFP

 

Asian and European markets mostly fell Monday with investors worried over the impact of China’s coronavirus outbreak on the global economy.

At midday in Europe, London was down 0.2 percent, Paris dipped 0.4 percent, and Frankfurt slid 0.3 percent.

“Coronavirus concerns are weighing,” noted CMC Markets UK analyst David Madden.

“The deepening health crisis is chipping away at market confidence.

“In London, stocks that are connected to China are under pressure. Mining, energy as well as travel stocks are in the red.”

The virus has killed more than 900 people, infected more than 40,000 across mainland China and spread to more than two dozen countries in what has been termed a global health emergency.

It has also jolted major supply chains for everything from food and household supplies to car and electronics parts.

In Asia, Tokyo’s benchmark Nikkei 225 index closed 0.6 percent down, while Hong Kong pared some losses, ending the day 0.6 percent lower after tanking 1.1 percent at the open.

Shanghai however rebounded after opening lower and ended with a 0.5-percent gain at the close.

Investors around the world have been watching with concern as China, the world’s second-largest economy, battles the novel coronavirus, which emerged at the end of last year in the central city of Wuhan.

The domestic impact was reflected in China’s inflation figures released Monday, which showed the highest rise in consumer prices in more than eight years, with food prices spiking more than 20 percent.

It has also disrupted the supply chains of major global firms such as Apple supplier Foxconn and auto giant Toyota. Key production facilities across China have been temporarily closed, with authorities imposing lockdowns and quarantine measures.

Oil slips lower

Depressed economic activity in China, the world’s largest importer and consumer of oil, has also hit energy markets.

A committee appointed by OPEC recommended additional output cuts on Saturday, citing the negative impact of the epidemic on economic activity.

Both main contracts, West Texas Intermediate and Brent Crude, were down by around half a percentage point on Monday.

Separately, cryptocurrency bitcoin rallied to stand above $10,000 for the first time since September, though analysts did not attribute the move to anything in particular.

 

AFP

Coronavirus Forces Global Stocks, Oil To Fall

Traders work on the floor of the New York Stock Exchange (NYSE) on January 27, 2020 in New York City.  Spencer Platt/Getty Images/AFP

 

Global stocks and oil dropped on Monday as panicked investors fled risky assets for safer bets gold, bonds, the dollar and the yen after China warned that a deadly new coronavirus was spreading fast.

Luxury goods makers and airlines suffered particularly on equity markets, as Chinese tourist spending is a key factor for them. Shares of energy and technology companies were also weak.

China extended its traditional Lunar New Year holidays to buy time in the fight against the epidemic but fears of a repeat of the 2003 Severe Acute Respiratory Syndrome (SARS) outbreak, which also began in China, spooked investors.

Recent record highs on stock markets gave them plenty of room for a reverse.

Key European stock markets dropped more than two per cent, while losses on Wall Street were only slightly less severe.

Oil prices also retreated on concerns over demand from China, the world’s top energy consumer.

 ‘Major panic’ 

“The bottom line is that the virus has become deadly and it has caused a major panic in markets,” said Ava Trade analyst Naeem Aslam.

Art Hogan, chief market strategist at National Holdings, said rising investor unease has reflected an increased number of cases and as the virus has spread to more regions.

“The escalation of the news causes more uncertainty,” especially for travel-oriented companies, Hogan said.

“I think it’s very logical, especially given that the sectors that would be affected by any slowdown are getting hit the hardest.”

Analysts said there were growing fears the crisis could become as bad as the SARS outbreak that hammered markets and the global economy 17 years ago.

The new outbreak has led China to lock down Wuhan, the epicenter of the disease and home to 11 million people while imposing tight travel restrictions on a number of other cities including Beijing.

The move comes during the Lunar New Year holiday when hundreds of millions of people criss-cross the country and spend huge amounts of money.

 Flight to safety 

Most Asian markets were closed for the Lunar New Year break but Tokyo was open and fell two per cent. Bangkok plunged nearly three per cent on worries over the Thai travel sector.

The flight to safety saw the yen rally against the dollar, with the Japanese unit now up more than one per cent from eight-month lows reached earlier this year.

The dollar, however, rose against the euro and pound.

Gold, another go-to asset in times of turmoil and uncertainty, seemed headed back towards $1,600 per ounce and the six-year peaks touched at the start of January.

While the main focus is on the spread of the virus, traders will also be keeping an eye on the release of earnings this week from top companies including Apple, Facebook and Samsung.

 Key figures around 2140 GMT 

New York – DOW: DOWN 1.6 percent at 28,535.80 (close)

New York – S&P 500: DOWN 1.6 percent at 3,243.63 (close)

New York – Nasdaq: DOWN 1.9 percent at 9,139.31 (close)

London – FTSE 100: DOWN 2.3 percent at 7,412.05 (close)

Frankfurt – DAX 30: DOWN 2.7 percent at 13,204.77 (close)

Paris – CAC 40: DOWN 2.7 percent at 5,863.02 (close)

EURO STOXX 50: DOWN 2.7 percent at 3,677.84 (close)

Tokyo – Nikkei 225: DOWN 2.0 percent at 23,343.51 (close)

Hong Kong – Hang Seng: Closed for a public holiday

Shanghai – Composite: Closed for a public holiday

Brent Crude: DOWN 2.3 percent at $59.32 per barrel

West Texas Intermediate: DOWN 1.9 percent at $53.14 per barrel

Dollar/yen: DOWN at 108.88 yen from 109.28 yen Friday

Euro/dollar: DOWN at $1.1019 from $1.1025

Pound/dollar: DOWN at $1.3055 from $1.3073

Euro/pound: UP at 84.40 pence from 84.34 pence

AFP

Tokyo Stocks Close Higher As Iran Worries Ease

People wait to cross a street in front of a stock indicator displaying share prices of the Tokyo Stock Exchange in Tokyo on January 9, 2020. Behrouz MEHRI / AFP

 

Tokyo stocks closed higher on Friday, extending rallies on Wall Street as worries over US-Iran tensions receded while investors eyed US job data.

The benchmark Nikkei 225 index gained 0.47 percent, or 110.70 points, to 23,850.57, While the broader Topix index was up 0.35 percent, or 6.11 points, at 1,735.16.

“The Japanese market reacted positively after US stocks ended at records,” Okasan Online Securities said in a commentary.

The gains marked a second straight session of advances on rising confidence that the US and Iran would avoid a conflict, following statements Wednesday by US President Donald Trump and Iranian officials.

Sentiment was further boosted by China’s announcement that Vice Premier Liu He will travel to Washington next week to sign the “phase one” deal with the United States, which has lowered trade tensions between the world’s two biggest economies, analysts said.

Traders also eyed on US job data expected to be released later Friday.

The dollar fetched 109.57 yen in Asian trade, against 109.51 yen in New York late Thursday.

In Tokyo, chip-making equipment manufacturer Tokyo Electron rose 1.44 percent to 24,840 yen and chip-testing equipment maker Advantest climbed 1.11 percent to 6,350 yen.

Some China-linked shares were higher, with industrial robot maker Fanuc gaining 2.35 percent to 20,670 yen and construction machine maker Komatsu advancing 1.21 percent to 2,616 yen.

Uniqlo chain operator Fast Retailing dropped 2.77 percent to 61,990 yen a day after it cut its full-year net profit forecast on sluggish sales in Asia owing to the Hong Kong protests and a boycott of Japanese products in South Korea.

Asian Markets Fall Amid US-China Tariffs

A Investor (not shown) looks at screens showing stock market movements at a securities company in Beijing on August 26, 2019.  WANG Zhao / AFP

 

Most Asian markets fell on Monday as fresh Chinese and US tariffs on goods worth hundreds of billions of dollars kicked in, though Donald Trump reiterated that the two sides were still due to hold talks this month.

Hong Kong was weighed down by another weekend of violence, fuelling worries about possible Chinese intervention in the financial hub, while the unrest has also hit property firms and Macau’s casinos.

Washington’s latest levies on imports from China took effect on Sunday and were followed by Beijing’s retaliation.

The measures are the latest in the long-running trade war between the world’s top two economies, which has rattled markets and hit growth across the globe.

READ ALSO: Hong Kong Students Defy China With Boycott

Still, Trump said negotiators would meet this month to discuss the issue. “We are talking to China, the meeting is still on,” he told reporters.

However, analysts warned there was unlikely to be any end in the near term.

“After a rough August traders should buckle up for more volatility in September,” said Neil Wilson, chief market analyst at Markets.com. “Trade and tariffs continue to gnaw away at investor confidence.”

Tokyo and Sydney each ended 0.4 percent lower, while Singapore shed 0.8 percent, with Manila, Bangkok and Jakarta also down.

But Shanghai rose more than one percent after a better-than-expected reading on Chinese factory activity, though another index showed the sector remained in contraction and investors remain uncertain about the outlook as the trade war bites deeper. There were also gains in Seoul, Wellington and Taipei.

Violence grips Hong Kong 

Hong Kong sank 0.4 percent after a weekend that saw some of the worst violence since protests began three months ago, with the airport targeted again, and demonstrators have called for a general strike on Monday though there was little sign that had been heeded.

The unrest has dragged a range of sectors, with tumbling tourist numbers hitting casinos and hotel chains, while real estate shares are also being sold off.

“Markets are fretting on the increased likelihood of direct Chinese intervention and what that would mean for the future of one of Asia’s leading financial centres,” said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA.

“The answer is, not good, to put it bluntly. The economic impact will surely show in Hong Kong data going forward and may temper the mood of equity traders in Asia as the new month begins.”

Oil prices were mixed after Friday’s steep losses owing to worries about the impact of the trade war on demand, while dealers were also concerned about reports that the Russian output cut last month fell short of an agreement with OPEC.

“A fissure is forming in OPEC+ compliance, which saw oil prices crater,” said Stephen Innes, APAC Market Strategist at AxiTrader.

“On the surface, while it is not likely a significant divergence, it’s the messaging that Russia is sending that spooks markets. While it could be little more than a tempest in an oil can at this stage, it’s worth monitoring nonetheless.”

Investors will be keeping an eye on markets in Argentina later in the day after the government imposed foreign-exchange controls on exporters following a week that saw a sharp drop in the peso.

In early trade London rose 0.5 percent, with traders bracing for a tough week in Westminster as Prime Minister Boris Johnson faces opposition from MPs across the political spectrum who have vowed legislation blocking a no-deal Brexit.

Also, EU negotiator Michel Barnier said the bloc will not change the divorce deal agreed with former PM Theresa May, fuelling expectations Britain will crash out with no agreement in place.

Paris and Frankfurt were both 0.1 percent higher.

 Key figures around 0810 GMT 

Tokyo – Nikkei 225: DOWN 0.4 percent at 20,620.19 (close)

Hong Kong – Hang Seng: DOWN 0.4 percent at 25,626.55 (close)

Shanghai – Composite: UP 1.3 percent at 2,924.11 (close)

London – FTSE 100: UP 0.5 percent at 7,240.73

Pound/dollar: DOWN at $1.2145 from $1.2162 at 2100 GMT

Euro/dollar: DOWN at $1.0981 from $1.0992

Dollar/yen: DOWN at 106.25 yen from 106.26 yen

Euro/pound: UP at 90.42 pence from 90.37 pence

West Texas Intermediate: UP five cents at $55,15 per barrel

Brent North Sea crude: DOWN four cents at $59.21 per barrel (new contract)

New York – Dow: UP 0.2 percent at 26,403.28 (close)

AFP

Hong Kong Stocks Take A Hit As Protest Continues

Protesters march with a banner that uses the stars of the Chinese national flag to depict a Nazi swastika symbol in the Central district of Hong Kong on August 31, 2019.  Anthony WALLACE / AFP

 

Hong Kong stocks sank on Monday, with property firms among the worst hit after the city was gripped by another weekend of violence that saw protesters battle police in the streets and cause more disruption at the airport.

Pro-democracy campaigners also caused chaos on the underground rail system in the morning and have called for another general strike as the three-month movement shows no sign of letting up.

The Hang Seng Index ended down 0.38 percent, or 98.18 points, at 25,626.55, with uncertainty over the China-US trade row also weighing.

The unrest is beginning to bite as tourist numbers fall, impacting a range of businesses, with property and casino companies among the worst hit.

READ ALSO: Hong Kong Students Defy China With Boycott

Henderson Land shed 1.1 percent, Sino Land dived 3.39 percent and Swire Properties retreated 0.39 percent, while casino giant Wynn Macau sank 2.42 percent, Sands China fell 2.11 percent and Galaxy Entertainment dropped 1.02 percent.

MTR Corp, which runs the city’s underground system, sank more than three percent.

“Protests have become more violent and tense, heightening uncertainty over how all this will end,” said Philip Tse, associate director at Bocom International.

“The impression among mainland Chinese that HongKong is not a pleasant place to travel, or even work or go to school, could be more lasting and that will deal a substantial blow to the local economy.”

There is also growing concern that China will soon send in forces to quell the demonstrations, which have drawn millions on to the streets of the semi-autonomous territory to protest against what they see as an erosion of freedoms and increasing interference in their affairs by Beijing.

“Markets are fretting on the increased likelihood of direct Chinese intervention and what that would mean for the future of one of Asia’s leading financial centres,” said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA.

“The answer is, not good, to put it bluntly. The economic impact will surely show in Hong Kong data going forward and may temper the mood of equity traders in Asia as the new month begins.”

Shanghai’s benchmark composite index rose 1.31 percent, or 37.87 points, to 2,924.11 , while the Shenzhen Composite Index, which tracks stocks on China’s second exchange, jumped 2.26 percent, or 35.67 points, to 1,614.92.

— Bloomberg News contributed to this story —

AFP

Trump Blames Fed For Economic Woes As Dow Plunges 3.1% In US Stocks Rout

Traders work on the floor of the New York Stock Exchange (NYSE) on August 14, 2019 in New York City. SPENCER PLATT / GETTY IMAGES NORTH AMERICA / AFP

 

It was an ugly day for Wall Street, as stocks plummeted Wednesday amid worsening economic fears after US Treasury yields briefly inverted, flashing a warning sign for a coming recession.

But President Donald Trump once again blamed the Fed for the economic woes and the yield curve inversion, saying the US central bank is a bigger threat than China and is “clueless.”

The Dow Jones Industrial Average fell 3.1 percent to finish at 25,479.42, a loss of about 800 points — its worst day of 2019.

The broad-based S&P 500 slumped 2.9 percent to 2,840.60, while the tech-rich Nasdaq Composite Index dropped 3.0 percent to 7,773.94.

The sell-off came shortly after the yield on the 10-year US Treasury note briefly dipped below the yield on the two-year, a dynamic that has been a reliable harbinger of past recessions.

The rout followed the latest stream of poor economic data from overseas, including the weakest Chinese factory output data in 17 years and German data showing the economy contracted in the second quarter.

The intensifying US trade war with China has been a key factor in the concerns about the slowing global economy, but shortly after the Dow hit bottom, Trump renewed his attacks on the Federal Reserve and its Chairman Jay Powell, whom Trump appointed.

“China is not our problem… Our problem is with the Fed,” Trump tweeted, blaming “clueless Jay Powell and the Federal Reserve.”

The Fed “Raised too much & too fast. Now too slow to cut… Germany, and many others, are playing the game! CRAZY INVERTED YIELD CURVE! We should easily be reaping big Rewards & Gains, but the Fed is holding us back,” he said.

A note from Oxford Economics said the research firm’s recession models as on “high alert.”

“Financial conditions have tightened sharply in August,” Oxford added in the note. “Following a huge bull-flattening trade, the Treasury market is pricing in expectations of slower growth, softer inflation, and increased Fed easing.”

The gloomy economic reports have fueled expectations that the leading central banks will undertake new stimulus measures.

The Federal Reserve cut the benchmark interest rates last month for the first time in more than a decade and is expected to make additional cuts in the months ahead.

Trump has said he wants the Fed to cut borrowing rates by a full point.

Banking shares suffered especially significant losses, with JPMorgan Chase, Citigroup and Bank of America all losing more than four percent. Bank profits typically suffer when interest rates decline.

AFP