Asia report: Most markets slide as Covid restrictions ramp up

Most markets in Asia racked up steep losses on Monday, as several countries in the region tightened civil restrictions in the face of a fast-growing Covid-19 coronavirus pandemic.

In Japan, the Nikkei 225 managed to rise 2.02% to 16,887.78 after returning from a public holiday on Friday, as the safe-haven yen strengthened 0.27% against the dollar to last trade at JPY 110.63.

Of the major components on the benchmark index, automation specialist Fanuc was up 8.49%, fashion firm Fast Retailing added 1.39%, and technology giant SoftBank Group surged 18.61%.

The broader Topix index was 0.68% firmer by the end of its trading session, closing at 1,292.01.

On the mainland, the Shanghai Composite lost 3.11% to 2,660.17, and the smaller, technology-heavy Shenzhen Composite slid 4.26% to 1,631.88.

South Korea’s Kospi was off 5.34% at 1,482.46, while the Hang Seng Index in Hong Kong was down 4.86% at 21,696.13.

Both of the blue-chip technology stocks were markedly weaker in Seoul, with Samsung Electronics down 6.39% and chipmaker SK Hynix falling 7.22%.

The coronavirus pandemic was continuing to spread rapidly, with confirmed infections reaching almost 300,000 by the end of the Asian day, with fatalities standing at just under 13,000, according to the World Health Organisation.

Investors were still digesting the impact of the restrictions in many countries, which have essentially stalled economies on an unprecedented scale, while also reacting to the news that a coronavirus stimulus bill in the United States had failed to pass a key vote in the Senate.

That led to futures on Wall Street hitting their 5% limit down long before markets there were due to open.

“Arguing, in the words of Chuck Schumer, that the $1.8 trillion package is a ‘large corporate bailout with no protections for workers and virtually no oversight’, the Democrats blocked the bill on Sunday night, with a 47-47 split leaving it short of the required 60 votes,” explained Spreadex analyst Connor Campbell.

“Even if the reasons behind the Democrats’ intransigence are sound, America’s inability to move things forwards stands in contrast to many of its now free-spending peers, and has sent the market into another tailspin.”

Oil prices were in the red at the end of the Asian day, with Brent crude last sliding 4.37% to $25.85 per barrel, and West Texas Intermediate off 0.4% at $22.54.

In Australia, the S&P/ASX 200 tumbled 5.62% to settle at 4,546.00, while across the Tasman Sea, New Zealand’s S&P/NZX 50 plunged 7.59% to end the trading day at 8,498.70.

The New Zealand government confirmed an escalation in restrictions over the weekend, saying all bars, restaurants, cafes, theatres and other non-essential businesses would now be required to close, while working from home was now being mandated.

Australian lawmakers, meanwhile, were still grappling with what to close and when, with some states deciding to bring the shutters down on schools and others placing restrictions on interstate travel.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.94% at AUD 1.7421 and the Kiwi retreating 1.24% to NZD 1.7758.