Asia report: Markets close lower as investors fret over economy
Markets were in the red across Asia on Thursday, as investor concern around the economic impact of the Covid-19 coronavirus pandemic continued to stew.
In Japan, the Nikkei 225 was down 1.74% at 19,914.78, as the yen strengthened 0.04% against the dollar to last trade at JPY 106.99.
Of the major components on the benchmark index, automation specialist Fanuc was down 3.86%, fashion firm Fast Retailing lost 0.23%, and technology conglomerate SoftBank Group slid 2.73%.
The broader Topix index was off 1.91% by the end of trading in Tokyo, settling at 1,446.55.
On the mainland, the Shanghai Composite lost 0.96% to close at 2,870.34, and the smaller, technology-heavy Shenzhen Composite was off 0.94% at 1,805.70.
South Korea’s Kospi slipped 0.8% to 1,924.96, while the Hang Seng Index in Hong Kong was off 1.45% at 23,829.74.
Shares of Chinese technology behemoth Tencent managed to close above the waterline in Hong Kong, finishing up 0.23%, after the firm beat expectations on first quarter earnings.
The company also said that revenue from online games was ahead 31% year-on-year at CNY 37.3bn, while total revenue from smartphone games advanced to CNY 34.7bn.
Both of the blue-chip technology stocks were weaker in Seoul, with Samsung Electronics down 1.13% and chipmaker SK Hynix off 3.59%.
Investors in Asia spent the early part of the session digesting the latest comments from US Federal Reserve chair Jerome Powell, who suggested that more support might be needed for the global economy amid the pandemic.
“While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks,” he said during a webcast for the Pearson Institute for International Economics.
CMC Markets analyst David Madden said the increase in the rate of new Covid-19 cases in countries that had eased lockdown restrictions was also causing concern among traders.
“The progress that was made, in relation to getting a handle on the health crisis and the reopening of economies, is at risk of being undone now that countries such as Germany, China and South Korea are experiencing an uptick in new cases.”
Oil prices were higher as the region went to bed, with Brent crude last up 4.08% at $30.38, and West Texas Intermediate rising 5.5% to $26.68.
In Australia, the S&P/ASX 200 fell 1.72% to end its trading day at 5,328.70, as fresh employment figures showed more than half a million people as losing their jobs in the sunburnt country in April.
According to the Australian Bureau of Statistics, seasonally-adjusted employment fell by 594,300 month-on-month.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.4% weaker at 10,745.16, led lower by energy generator and retailer Mercury, which was off 4.5%.
Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.41% at AUD 1.5554, and the Kiwi retreating 0.42% to NZD 1.6745.