Sunday, January 24, 2021

Asian markets fall on coronavirus impact woes

Hong Kong, February 10: Markets across the Asia-Pacific were in the red on Monday with investors worried about the impact of the China coronavirus outbreak on the global economy.
The virus has killed more than 900 people, infected 40,000 across mainland China and spread to more than two dozen countries in what has been termed a global health emergency.
It has also jolted major supply chains for everything from food and household supplies to car and electronics parts.
Tokyo’s benchmark Nikkei 225 index closed 0.6% down, while Hong Kong pared some losses, ending the day 0.6% lower after tanking 1.1% at the open.
Elsewhere, Sydney slipped 0.1%, Seoul was down 0.5% and Singapore was 0.7% lower.
Shanghai, however, rebounded after opening 0.5% lower and was up 0.5% at the close.
Taipei, Jakarta, and Mumbai were also under water.
Investors around the world have been watching with concern as China, the world’s second-largest economy, battles the novel coronavirus, which emerged at the end of last year in the central city of Wuhan.
The domestic impact was reflected in China’s inflation figures released Monday, which showed the highest rise in consumer prices in more than eight years, with food prices spiking more than 20%.
It has also disrupted the supply chains of major global firms such as Apple supplier Foxconn and auto giant Toyota.
Key production facilities across China have been temporarily closed, with authorities imposing lockdowns and quarantine measures.
The World Health Organization has said there are some signs that the epidemic is stabilising in China, but the agency’s chief has cautioned that the number of cases overseas could be just “the tip of the iceberg”.
“This coronavirus seems to be going on for longer, is infecting more people and the hit to growth will be longer,” Diana Mousina, an economist at AMP Capital Investors, told Bloomberg TV.
“You won’t be able to recoup all of the negative impacts in the first quarter.”
Analysts have cautioned that the economic impact of the coronavirus outbreak in mainland China and beyond is yet to be fully understood.
“Let’s not try to sugar coat things here,” said Stephen Innes, chief market strategist at AxiCorp.
“With a chunk of China’s industrial complex shuttered beyond (Lunar New Year), we’re headed for one of the worst Q1 economic growth periods on record.”
The Asian falls at the start of the week came after a negative cue on Friday on Wall Street, where the three main indexes closed down.
Depressed economic activity in China, the world’s largest importer and consumer of oil, has also hit energy markets, with crude prices tumbling.
A committee appointed by OPEC recommended additional output cuts on Saturday, citing the negative impact of the epidemic on economic activity.
Both main contracts, West Texas Intermediate and Brent Crude, were down 0.3 per cent on Monday.
“Asian markets opened much lower and have recovered some of those initial losses,” said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA.
“It is, however, hard to see further gains occurring from here against the backdrop of the coronavirus.
“That is likely to be the theme of the week, as the economic damage is totalled up from the outbreak.”
In early European trade, London was down 0.3%, Paris dipped 0.3%, and Frankfurt slid 0.2%.
China announces reward for undergoing coronavirus test
The Chinese authorities have urged the masses to come forward to undergo coronavirus tests and have also announced a 1,000 yuan (around $143) reward for the people reaching hospital to get tested for the epidemic that has claimed over 800 lives and infected more than 37,000 people.
The Hubei province administration has taken this initiative after noticing that the streets of Wuhan, a city with over 1 crore population, have started looking deserted. People, fearing infection, have confined themselves to their houses.
According to the Global Times, the administration said residents with fever and other symptoms must get themselves examined at hospital and claim the reward.
The Commerce Ministry of China said seven million medical masks, three lakh protective suits and two lakh goggles – donated by 21 countries and an international organisation – had arrived and would be distributed to the people soon.
Meanwhile, the Beijing administration has banned the N95 mask for the public. A similar measure has been implemented in the Zhejiang Province.
According to officials, the N95 masks will be available only to medical professionals engaged in the treatment of coronavirus-hit people. (AFP)