Asian Shares Fall On Recession Worries

Asian stocks slid further on Friday after a historic drop by U.S. markets overnight as investors became concerned that governments had moved too late to slow the spread of the novel coronavirus.

Investors also fretted that stimulus packages will not be enough to avert a global recession triggered by the coronavirus outbreak, which has infected more than 125,000 people around the world and killed more than 4,600.

China’s Shanghai Composite Index ended 36.06 points, or 1.2 percent, lower at 2,887.43, while Hong Kong’s Hang Seng Index closed down 276.16 points, or 1.1 percent, at 24,032.91.

Japanese shares slumped amid a global rout on fears of a recession linked to the coronavirus outbreak.

The Nikkei 225 Index dropped more than 10 percent to suffer its biggest intraday drop in about 30 years before finishing down 1,128.58 points, or 6.1 percent, at 17,431.05, marking the lowest close since November 2016. The broader Topix fell 66.18 points, or 5 percent, to 1,261.70.

After a three-way emergency meeting between the government, the Financial Services Agency and the Bank of Japan, Yoshiki Takeuchi, vice-finance minister for international affairs, told reporters that the government and the central bank will pay close attention to market and economic trends and take appropriate action as needed to ensure financial stability.

Earlier in the day, the Bank of Japan said that it would buy government bonds worth 500 billion yen ($4.7 billion) to inject money into the markets. In an unscheduled operation in the afternoon, the central bank said that it would purchase an additional 200 billion yen of Japanese government bonds with five to 10 years to maturity.

In stock-specific action, Japan Airlines shares slumped 12.5 percent. The airline announced its decision to temporarily reduce domestic services between March 16 and March 28 in response to the COVID-19 outbreak.

Market heavyweight SoftBank fell 5 percent despite announcing a 500 billion yen, or $4.7 billion, share buyback that will start on Monday.

Meanwhile, Australian markets reversed early losses to end sharply higher for the day. The benchmark S&P/ASX 200 Index fell more than 8 percent before recovering to end the session up 234.70 points, or 4.4 percent, at 5.539.30. The broader All Ordinaries Index soared 219.80 points, or 4.1 percent, to 5,590.70.

The big four banks rose 2-5 percent, with Commonwealth Bank leading the surge. Macquarie Group spiked 4.2 percent after it withdrew a capital notes offer due to the highly volatile market.

Mining heavyweights BHP and Rio Tinto rose 1.5 percent and 4.8 percent, respectively, while smaller rival Fortescue Metals Group jumped 13 percent.

In the oil space, Woodside Petroleum soared nearly 10 percent, Santos rallied 6.8 percent, Origin Energy surged over 7 percent and Oil Search climbed 17.2 percent.

Virgin Australia Holdings soared more than 31 percent despite suspending its full-year earnings outlook.

South Korea’s Kospi tumbled 62.89 points, or 3.4 percent, to 1,771.44 to post its biggest weekly drop since the 2008 financial crisis. Earlier in the day, the index plunged 8.4 percent to a nearly 10-year low, triggering circuit breakers for the first time in nearly two decades.

The Bank of Korea said it was considering an emergency monetary policy meeting to discuss an interest rate cut.

South Korea’s President Moon Jae-in asked the government to bring forward “unprecedented solutions,” saying the crisis sparked by the coronavirus outbreak could not be compared with previous health alerts such as SARS.

New Zealand shares slumped as the spread of the coronavirus created uncertainty and panic across the globe. The benchmark S&P/NZX 50 Index fell as much as 8 percent in early trading before ending the session down 506.41 points, or 4.9 percent, at 9,826.86, its lowest close since April.

The manufacturing sector in New Zealand turned to expansion for the first time in three months, the latest survey from BusinessNZ revealed today with a manufacturing PMI score of 53.2, up from 49.8 in January.

Tourism Holdings slumped 16.7 percent after scrapping its previous forecast for a full year profit of about $24 million. Likewise, Auckland International Airport declined 7.8 percent after slashing its earnings guidance.

Malaysia’s KLSE Composite Index plunged 5.3 percent. The country’s industrial production rose 0.6 percent year-on-year in January after a 2.1 percent increase in December, official data showed.

Indonesia’s Jakarta Composite Index edged up 0.2 percent as the government announced details of a second emergency stimulus plan to cushion the impact from the coronavirus.

Trading was halted briefly on Wall Street for the second time this week on Thursday as investors reacted to a cascade of cancellations and shutdowns across the globe amid the deepening coronavirus crisis.

The Dow Jones Industrial Average plummeted 10 percent to record its biggest one-day percentage drop since the stock market crash of 1987.

The tech-heavy Nasdaq Composite nosedived 9.4 percent and the S&P 500 slumped 9.5 percent to plunge into bear market territory despite dramatic intervention by two central banks and a prime-time address by President Trump.

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