Asian Stocks Set for Losses Amid Virus Concern

TheEdge Thu, Jan 23, 2020 07:25am - 4 years View Original


(Jan 23): Asian stocks looked set to resume declines amid ongoing efforts to control the widening coronavirus outbreak. U.S. equities pared earlier gains to close flat and Treasury yields edged lower.

After a day of respite Wednesday from a sharp sell-off earlier in the week, futures in Japan and Hong Kong pointed lower again Thursday and Australian shares opened down modestly. The Chinese city at the center of the outbreak suspended outbound flights and rail service, as the country ramps up efforts to contain the illness. Thursday is the final day of trading for mainland Chinese equities before the weeklong Lunar New Year holiday. In a volatile session, the S&P 500 Index ended flat as gains in technology shares and positive earnings reports offset concern about the virus.

With global equities still close to record highs, investors are on high alert for any developments that could derail the momentum. Caution has returned this week on concerns the coronavirus that has already killed at least 17 people could turn into a global pandemic.

“Markets have gotten a little bit ahead of themselves and they have probably gotten a little bit complacent,” Burns McKinney, portfolio manager at Allianz Global Investors, told Bloomberg TV in New York. “We have seen policy makers this time move quickly and take it very seriously.”

Meanwhile, the European Central Bank later decides on policy when its two-day meeting concludes., followed by a press conference with President Christine Lagarde. The pound climbed after U.K. Prime Minister Boris Johnson’s Brexit deal cleared its final hurdle in Parliament.

Elsewhere, oil extended declines on concern the deadly virus will curb energy demand if the crisis worsens. The Australian dollar was steady ahead of jobs data.

Here are some events to watch out for this week:

    Companies including Intel Corp. and Procter & Gamble Co. will post results.
    Policy decisions are due from central banks in Indonesia and the euro region.
    The World Economic Forum, the annual gathering of global leaders in politics, business and culture, continues in Davos, Switzerland.

These are the main moves in markets:
Stocks

    Futures on the S&P 500 Index were flat as of 8:08 a.m. in Tokyo. The underlying gauge rose less than 0.1% on Wednesday in New York.
    Futures on Japan’s Nikkei 225 slipped 0.7%.
    Hang Seng futures earlier declined 0.7%.
    Australia’s S&P/ASX 200 Index dipped 0.3%.

Currencies

    The yen was flat at 109.83 per dollar.
    The offshore yuan held at 6.9118 per dollar.
    The Bloomberg Dollar Spot Index fell 0.1%.
    The British pound was at $1.3140 after climbing 0.7%.
    The euro remained at $1.1095.

Bonds

    The yield on 10-year Treasuries fell one basis point to 1.76%.
    Australia’s 10-year yield dipped one basis point to 1.10%.

Commodities

    West Texas Intermediate crude dropped 1% to $56.17 a barrel.
    Gold was little changed at $1,558.82 an ounce.

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