SINGAPORE (Reuters) – Asian stocks posted their biggest decline in eight sessions, bonds rose and the US dollar held firm on Thursday due to growing cases of coronavirus in the United States and the International Monetary Fund’s downgrade to economic projections reduced confidence in a recovery.
FILE PHOTO: Passers-by wearing protective face masks after a coronavirus outbreak are reflected on a screen showing stock prices outside a brokerage in Tokyo, Japan on March 6, 2020. REUTERS / Issei Kato
MSCI’s broader Asia-Pacific index of stocks outside Japan fell 0.7%, the Tokyo Nikkei fell 1.1% and Australia’s ASX 200 fell 2.1%.
US stock futures. USA They declined 0.4%, suggesting Wednesday’s Wall Street slump could hold more. However, in Europe, where solid data has supported risk appetite this week, futures were only marginally in the red.
German DAX futures fell 0.1% and EuroSTOXX 50 futures fell 0.3%. UK FTSE futures fell 0.4%.
Florida, Oklahoma and South Carolina reported record increases in new cases on Wednesday. Seven other states had record levels earlier in the week, and Australia posted its biggest daily increase in infections in two months.
The governors of New York, New Jersey and Connecticut ordered travelers from eight other states to quarantine on arrival, a concern for investors who were mostly awaiting the end of pandemic restrictions.
Disney has delayed the reopening of theme parks and resorts in California, while Texas faces a “massive outbreak” and considers new localized restrictions, Governor Greg Abbott said in a television interview.
Australian airline Qantas said Thursday it does not expect significant international operations until at least July 2021, as the airline announced plans to lay off a fifth of its workforce and raise $ 1.3 billion to stay afloat.
The International Monetary Fund said it now expects a deeper global recession, with output set to drop 4.9% this year, much stronger than the 3% contraction expected in April.
“There is a bit of a reality bite,” said Damian Rooney, a senior institutional salesman for brokerage Argonaut in Perth.
“I don’t think there is a particular drop that has broken the camel’s back, but people are a little nervous: there are many reasons to be very cautious.”
The dollar clung to broad overnight gains that had raised it from near a two-week low.
Yields on 10-year US Treasury bonds fell to a ten-day low of 0.6692%. Hong Kong and mainland China markets were closed for holidays on Thursday.
Anxiety is likely to continue to rise before the US data. USA, including unemployment claims figures at 1230 GMT, as well as the latest coronavirus numbers. Confidence could be affected by disappointment in any case.
“Any improvement in the jobs could be offset if there is another recovery in case load in the United States,” said Kyle Rodda, market analyst at IG brokerage in Melbourne.
“It is a potential handbrake in the growth rebound story.”
Bank of England chief economist Andy Haldane will also speak about the future of the society at 1700 GMT. Haldane argued against last week’s increase to the bank’s bond purchase program.
In addition to worries about the virus, troubling signs on the trade front and political uncertainty have baffled investors.
The United States has added items valued at $ 3.1 billion to a list of eligible European products to be affected by import tariffs.
The Trump administration has determined that Huawei and China’s video surveillance company Hikvision are owned or controlled by the Chinese military, laying the groundwork for sanctions and new Sino-US tension.
That has stalled a rebound in riskier currencies, pushing the Australian dollar below 69 cents and the kiwi stuck at 64 cents.
Gold stabilized at $ 1,761.85 an ounce.
US crude futures fell 26 cents a barrel or 0.7% to $ 37.75 and Brent crude futures fell 0.8% to $ 39.99.
Report by Tom Westbrook in Singapore. Additional reports from Jessica DiNapoli in New York; Editing by Sam Holmes and Shri Navaratnam