Asia report: Oil price crash sees markets tumble

Asian markets fell through the floor on Monday, with currencies in much of the region also sliding, as market volatility rocketed following a weekend of coronavirus-related developments.

In Japan, the Nikkei 225 was down more than 1,000 points, falling 5.07% to 19,698.76, as the safe-haven yen strengthened 2.54% against the greenback to last trade at JPY 102.71.

Of the major components on the benchmark index, automation specialist Fanuc was down 5.8%, fashion firm Fast Retailing lost 3.01%, and technology giant SoftBank Group plummeted 10.43%.

The broader Topix was 5.61% lower at 1,388.97 by the end of trading in Tokyo.

According to Japan’s Cabinet Office, the country’s economy contracted at an annualised rate of 7.1% on the October to December quarter - much larger than the preliminary estimate of 6.3%.

It was also a bigger decline than the 6.6% expected by economists in a Reuters poll.

On the mainland, the Shanghai Composite lost 3.01% to close at 2,943.29, and the smaller, technology-heavy Shenzhen Composite was off 3.79% to 1,842.66.

In fresh data out of Chins, the country’s overseas shipments contracted 17.2% in the January and February period compared to a year ago - much larger than the 14% fall predicted by economists polled by Reuters.

The People’s Republic also racked up a trade deficit of $7.09bn for the period, which was a big miss on the anticipated surplus of $25.6bn.

South Korea’s Kospi was down 4.19% at 1,954.77, while the Hang Seng Index in Hong Kong plunged 4.23% to 25,040.46.

Both of the blue-chip technology stocks were well into the red in Seoul, with Samsung Electronics down 4.07% and chipmaker SK Hynix losing 6.16%.

The Korean won slid 1.02% to KRW 1,204.51 against the dollar.

Market turmoil was the theme of the day in the region, as oil prices plunged following a cut in prices from Saudi Arabia, leading to market jitters around a price war.

The move from the Middle Eastern kingdom came after OPEC failed to reach a deal with its allies around agreed production cuts, given demand for crude has sunk amid the Covid-19 outbreak.

Brent crude futures were last down 25.12% at $36.18 per barrel, and West Texas Intermediate had plunged 27.37% to $32.41.

“Equity markets continue to react to the spread of coronavirus, which has seen Italy put its most prosperous regions on lockdown, but it is the collapse of the oil price and the end of OPEC+ … that is providing a fresh reason to head for the exits,” said IG senior market analyst Chris Beauchamp.

In Australia, the S&P/ASX 200 shed 7.33% to settle at 5,760.60, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was 2.92% weaker at 11,091.81.

In currencies, the Australian dollar was last 0.7% weaker against the dollar at AUD 1.5170 and the Kiwi had lost 0.41% to NZD 1.5806.