Asia report: Markets mixed after another dire day on Wall Street

Markets in Australia finished mixed on Tuesday, with Australian stocks posting decent gains, as investors reacted to the Dow’s new worst day since 1987 on Wall Street overnight.

In Japan, the Nikkei 225 managed gains of 0.06% to 17,011.53, as the yen weakened 1.18% against the dollar to last trade at JPY 107.08.

Of the major components on the benchmark index, automation specialist Fanuc was down 1.42%, Uniqlo owner Fast Retailing off 4.83%, and technology giant SoftBank Group 0.74% weaker.

The broader Topix was higher by the end of trading on Tuesday, rising 2.6% to finish at 1,268.46.

On the mainland, the Shanghai Composite was 0.34% lower at 2,779.64, and the smaller, technology-focussed Shenzhen Composite slid 0.43% t0 1,704.74.

South Korea’s Kospi was down 2.47% at 1,672.44, while the Hang Seng Index in Hong Kong gained 0.87% to 23,263.73.

Both of the blue-chip technology stocks were weaker in Seoul, with Samsung Electronics down 3.27% and chipmaker SK Hynix slipping 0.25%.

Investors in Asia arrived on Tuesday morning to another dire session on Wall Street overnight, where the Dow Jones Industrial Average lost 2,997.10 points to close at 20,188.52 - its new worst performance since the Black Monday crash of 1987.

The S&P 500, meanwhile, lost 12% to reach its lowest level since December 2018, while the Nasdaq Composite fell 12.3% on its worst day in history.

After Monday, the Dow is now down 31.7% from its all-time high, with the S&P and the Nasdaq both almost 30% down from their records.

But market watchers were also starting to pay attention to the stimulus efforts from a number of countries.

“The fiscal put is coming - Japan, France, Australia, New Zealand et al are starting to respond with bigger spending measures to counter the effects of the virus,” said Neil Wilson, chief market analyst at Markets.com.

“The UK is beefing up its response after the Budget's £30bn offer was considered to be short of the mark, whilst the market enjoyed a small bounce overnight as Donald Trump was said to urge lawmakers to adopt his approach to open the spending spigots.”

“The monetary measures are in place, the fiscal response is slowly getting there.”

All that was needed now, Wilson said, was for the virus to peak, with the ingredients for an “epic market rally” in place.

“The unknown is the virus and the economic damage, but equity markets are currently well priced for a sizable hit to the global economy. Until then epic volatility remains our companion.”

Oil prices staged a minor recovery through the Asian session, with Brent crude last up 0.96% at $30.34 per barrel, and West Texas Intermediate rising 2.41% at $29.41.

In Australia, the S&P/ASX 200 was 5.3% firmer at 5,293.40, after the benchmark plunged almost 10% in the previous session.

The minutes from the Reserve Bank of Australia’s March meeting were released during the day, when the central bank cut its official cash rate by 25 basis points to a new record low of 0.5%.

“In considering the policy decision, members observed that it was becoming increasingly clear that Covid-19 would cause major disruption to economic activity around the world,” the RBA said in its minutes.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.45% to 9,434.42, led lower by bank holding company Heartland Group Holdings, which was off 11.6%.

Vista Group International was down 10.9%, after the cinema industry technology firm cancelled its dividend and withdrew its 2020 guidance as theatre operators around the world closed their doors.

Both of the down under dollars were sharply weaker on the greenback, with the Aussie last off 1.96% at AUD 1.6669, and the Kiwi retreating 1/69% to NZD 1.6822.