Asia report: Markets mixed as investors digest disastrous IMF forecast

Markets in Asia closed mixed on Wednesday, as investors digested harrowing global forecasts from the International Monetary Fund released overnight, while traders in Korea remained off work as the country headed to the polls.

In Japan, the Nikkei 225 was down 0.45% at 19,550.09, as the yen weakened 0.14% against the dollar to last trade at JPY 107.37.

Of the major components on the benchmark index, automation specialist Fanuc was down 2.54%, Uniqlo owner Fast Retailing lost 0.72%, and technology conglomerate SoftBank Group was 1.97% weaker.

Convenience store operator FamilyMart was well into the red, losing 5.18%.

The broader Topix index ended the session positively, eking out gains of 0.039% to close at 1,434.07.

On the mainland, the Shanghai Composite was down 0.57% at 2,811.17, and the smaller, technology-heavy Shenzhen Composite lost 0.53% to end at 1,736.13.

South Korean markets were closed as the country pressed ahead with its general election, despite the Covid-19 coronavirus pandemic, while the Hang Seng Index in Hong Kong was 1.19% weaker at 24,145.34.

The economic fallout from the ongoing Covid-19 coronavirus pandemic were very much at the top of the agenda, after the International Monetary Fund warned that the world's economy was likely to experience its worst financial crisis since the Great Depression almost a century ago.

In its latest revision, the IMF said it was now expecting the global economy to contract by 3% in 2020, which lay in stark contrast to its January forecast for growth of 3.3%.

Spreadex analyst Connor Campbell said the losses were related to ongoing fears over the depth and length of the recession, "including what is going to be a hell of a contraction in the second quarter - a taste of which will be provided by China on Friday.

“This perhaps combined with a report on Tuesday that suggested social distancing measures may have to be intermittently in place until 2022.

“That Trump - who seems to be having a meltdown - has also halted US funding to the World Health Organisation was just another reason for a sour start to Wednesday.”

Oil prices were in the red by the end of the Asian day, with Brent crude last down 4.45% at $28.34 per barrel, and West Texas Intermediate off 3.71% at $19.39.

In Australia, the S&P/ASX 200 lost 0.39% to end its trading day at 5,466.70, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was ahead 2.47% at 10,409.94.

Crude processor NZ Refining leapt 15.1% after it announced a strategic review, in which it would investigate a break-up of its operation, or a move to a pure fuel import model.

Either option would involve the complete closure of oil refining in the country, as the company - which counts BP and ExxonMobil among its major shareholders - is the only processor of crude oil in New Zealand.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 1.98% at AUD 1.5830, and the Kiwi 1.76% weaker at NZD 1.6666.