South Korea falls almost 2% as Asian stocks fall; IMF cuts forecasts again

Shares in the Asia Pacific fell Thursday afternoon, after the International Monetary Fund cut its economic forecast again on Wednesday.

South Korea’s Kospi led the losses among the region’s main markets as it fell 1.77%. In Japan, the Nikkei 225 fell 0.99%, while the Topix index dropped 1%.

Shares in Australia also declined, with the S & P / ASX 200 falling 1.62%. In Southeast Asia, the Straits Times Index fell 1.25%.

Overall, the ex-Japan MSCI Asia Index fell 0.7%.

The China and Hong Kong markets are closed on Thursday for holidays.

The IMF now estimates a 4.9% contraction in global gross domestic product in 2020, less than the 3% drop it forecast in April.

“The Covid-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is expected to be more gradual than anticipated,” the IMF said Wednesday in its Outlook update. of the world economy.

“In May, every economy we tracked, more than a hundred, was considered to be in recession,” Mark Zandi, chief economist at Moody’s Analytics, told CNBC’s “Squawk Box” on Thursday.

“Generally, in recessions globally you have a part of the world, most of the world, that is navigating the recession reasonably well, comes out the other side and is the engine of … growth in the economic recovery” Zandi said. “There is no obvious engine of growth here.”

Investor reaction to late-night movements on Wall Street was also noted on Thursday. The Dow fell 710.16 points, or 2.7%, to close at 25,445.94. The S&P 500 ended its trading day 2.6% lower at 3,050.33 while the Nasdaq Composite fell 2.2% to close at 9,909.17. It was the worst day for the Dow, S&P 500, and Nasdaq since June 11.

Movements in the United States came after an increase in coronavirus cases in certain states, with Florida and California reporting a record number of new cases. According to data collected by Johns Hopkins University, more than 2.36 million cases of coronavirus have been reported in the United States. While at least 121,662 lives have been taken.

The US Dollar Index, which tracks the dollar against a basket of its peers, was at 97.32 after rising from below-97 levels seen previously.

The Japanese yen was trading at 107.20 per dollar in a volatile week of trading that has seen it drop below 106.4 against the dollar. The Australian dollar changed hands to $ 0.6865 after falling from levels above $ 0.69 seen yesterday.

Oil prices were lower in the afternoon of Asian trading hours on Thursday, with international benchmark Brent crude oil futures falling 0.47% to $ 40.12 a barrel. US crude oil futures are down 0.34% at $ 37.88 a barrel.

– CNBC’s Silvia Amaro contributed to this report.