Asia Stocks Set to Drop as China Traders Return: Markets Wrap

[James48843]

Shanghai market closed down over 8%, that was pretty much needed to catch up with the fall around the world last week. Shanghai had been closed all week last week for Chinese New Years Holiday.

I'm thinking that we may get a one-day rebound, and then the markets are going to head south again, as the CoronaVirus 2019 continues to become major front-page news. The deaths are all (except 1) in China, but that will change soon as well. The number of infected is going to skyrocket this week and next week, and I don't think the markets have those numbers - tens of thousands, and then Hundreds of thousands ill, built into their level now. By Monday next week, the numbers are going to be huge.

 

[NewsFeeder]

Asia Stocks Set to Drop as China Traders Return: Markets Wrap

(Bloomberg) -- Traders braced for the reopen of mainland Chinese markets on Monday, with stocks across the Asia Pacific region set for further declines as the deadly virus outbreak showed no signs of slowing.Futures indicated declines in Tokyo, Hong Kong and Australia after the S&P 500 Index on Friday slumped 1.8%. Investors are also assessing intervention from China’s central bank, which is providing more than $21 billion of liquidity in a bid to support markets and its economy. Among the weekend’s coronavirus developments, a man died in the Philippines in the first fatality outside China.The offshore yuan was steady early Monday after weakening last week through 7 per dollar. The Aussie and yen were little changed.Investors are preparing for more turmoil after global equities last week posted the worst week since August amid concern growth will falter as the virus spreads. The PBOC pledged 150 billion yuan ($21.7 billion) in liquidity, but that may not be enough to prevent the country’s stocks and currency from falling, analysts said. Airlines in Asia, Europe and the Middle East have stopped services to mainland China.“If the outbreak does not dissipate soon, the authorities in both China and elsewhere are likely to extend travel bans, people will stay at home, and the increase in uncertainty will cause consumers to delay consumption and firms to defer investment,” said Erik Nielsen, group chief economist at UniCredit Bank AG in London. “It’s way too early to dismiss this outbreak as just a brief interruption of constructive markets.”Elsewhere, the pound dipped as investors reacted to a report that U.K. Prime Minister Boris Johnson could walk away from talks over Britain’s future trade relationship with the European Union.Crude is also set to decline as the virus lockdown eats into China’s demand for oil products. China is by far the biggest market for OPEC+ crude exports.These were the main moves in markets:StocksThe S&P 500 declined 1.8% on Friday.Futures on Japan’s Nikkei 225 lost 1.8%.Hang Seng futures retreated 1.2%.Futures on Australia’s S&P/ASX 200 Index dropped 1.7%.CurrenciesThe yen was at 108.43 per dollar.The offshore yuan added 0.1% to 6.9910 per dollar.The euro bought $1.1087.The pound lost 0.2% to $1.3185.BondsThe yield on 10-year Treasuries fell eight basis points to 1.51% on Friday.CommoditiesWest Texas Intermediate crude lost 1.1% to $51.56 a barrel on Friday.Gold rose 1% to $1,589.16 an ounce.To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.netTo contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, James Ludden, Virginia Van NattaFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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