Asia report: Markets tumble again as governments unveil stimulus

Markets in Asia were back into negative performance mode on Wednesday, with Australia’s benchmark sliding into bear market territory, as investors digested the response of governments to the Covid-19 coronavirus outbreak.

In Japan, the Nikkei 225 was down 2.27% at 19,416.06, as the safe-haven yen strengthened 0.89% against the dollar to last trade at JPY 104.7.

Automation specialise Fanuc managed gains of 0.9%, but of the benchmark index’s other major components, fashion firm Fast Retailing was down 1.9% and technology giant SoftBank Group lost 3.62%.

The broader Topix index lost 1.53% by the end of trading in Tokyo, settling its trading session at 1,385.12.

Lawmakers in Tokyo unveiled their latest stimulus measures to combat the economic effect of the coronavirus outbreak on Wednesday, promising more than JPY 430bn in aid for small businesses.

On the mainland, the Shanghai Composite was down 0.94% at 2,968.52, and the smaller, technology-heavy Shenzhen Composite slid 1.48% to 1,859.40.

South Korea’s Kospi was down 2.78% at 1,908.27, while the Hang Seng Index in Hong Kong was off 0.63% at 25,231.61.

Shares in Cathay Pacific, the special administrative region’s largest airline, were up 3.1% even after it posted a 27.9% fall in profit attributable to shareholders for 2019.

Cathay’s chairman Patrick Healy added that the airline was expecting to “incur a substantial loss” for the first half of 2020, given the “substantial” fall in demand for travel amid the coronavirus outbreak.

Both of the blue-chip technology stocks were well below the waterline in Seoul, with Samsung Electronics falling 4.58% and SK Hynix down 4.04%.

Investors were also looking across the Pacific to see Washington’s response to the outbreak during the session, with US president Donald Trump reportedly suggesting a 0% payroll tax for both employers and employees for the rest of the year at a meeting with Republican lawmakers overnight.

Oil prices were lower at the end of the Asian session, with Brent crude last down 3.68% at $35.90 per barrel, and West Texas Intermediate losing 3.59% to $33.17.

In Australia, the S&P/ASX 200 was 3.6% weaker at 5,725.90, taking it into ‘bear market’ territory - defined as being more than 20% lower than its 52-week peak.

Canberra unveiled a AUD 2.4bn stimulus package on Wednesday, that it said would see “unprecedented support” provided to primary care, aged care, hospitals, research, and the country’s national medical stockpile.

Flag carrier Qantas still saw its shares fall 9.21%, after it announced more cuts to its international schedule, slashing almost a quarter off its capacity for the next six months.

The airline said it was experiencing a “sudden and significant” drop in forward bookings as the virus made its way through North America and Europe.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 0.22% at 10,873.60, led lower by subscription broadcaster Sky Network Television, which was off 9.8%.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.31% at AUD 1.5325, and the Kiwi advancing 0.88% to NZD 1.5805.