COVID-19 Effect: Asian Stocks Fall after US Decline, Oil Steadies

Asian stocks declined after a weak session on Wall Street, as bleak retail, manufacturing and homebuilding data added to concerns about a severe U.S. recession. Oil steadied near its lowest in two decades.

Shares from Sydney to Seoul retreated, though declines were shallower than those seen in the U.S. overnight. Contracts on the S&P 500 also slipped after the gauge lost more than 2% on Wednesday, when all major sectors dropped. Financial shares slid as Goldman Sachs Group Inc.’s investment portfolio took a hit from the coronavirus pandemic, while Bank of America Corp. and Citigroup Inc. followed rivals in setting aside billions for loan losses. Treasuries held their gains, while the dollar continued to climb.

Both corporate earnings and economic data are highlighting the severe impact of the economic shutdown designed to combat the spread of the coronavirus. U.S. retail sales and factory output posted historic declines in March, and surveys in April looked even worse. Manufacturing in New York state and sentiment among American homebuilders plunged.

“We don’t know what the economy is going to look like over the next year -- there is a lot of uncertainty with the virus," Mark Kiesel, global credit chief investment officer at Pacific Investment Management Co., said on Bloomberg TV. “We are not through the woods yet -- there could be a second wave."

Meanwhile, President Donald Trump said data suggest the U.S. has “passed the peak" on new cases and added he will announce on Thursday guidelines to relax stay-at-home rules. That comes as Covid-19 has now infected 2 million people globally, with fatalities around the world topping 133,000.

Elsewhere, oil edged higher after tumbling Wednesday amid a record collapse in fuel demand and the biggest ever weekly increase in domestic crude supplies. Mexico’s peso retreated after Fitch downgraded the country’s debt rating.

Still to come this week:

BlackRock Inc.’s earnings are set for Thursday.

China releases GDP, industrial production and retail sales and jobless figures Friday.

These are the main moves in markets:

Stocks

Futures on the the S&P 500 slid 0.6% as of 9:01 a.m. in Tokyo. The underlying gauge dropped 2.2% on Wednesday.

Japan’s Topix index slid 1.3%.

South Korea’s Kospi lost 0.7%.

Australia’s S&P/ASX 200 Index sank 0.9%.

Currencies

The euro was at $1.0904, little changed.

The yen dipped 0.1% to 107.63 per dollar.

The offshore yuan traded flat at 7.0705 per dollar.

Bonds

The yield on 10-year Treasuries remained at 0.63%.

Australia’s 10-year yield declined about eight basis points to 0.84%.

Commodities

West Texas Intermediate crude added 2.3% to $20.33 a barrel.

Gold was at $1,716.21 an ounce, little changed.

(Except for the headline, this story has not been edited by Scrabbl staff and is published from a syndicated feed.)