Currency Hedger Trading Desk May 4, 2020
Asian stocks ended mostly lower on Monday amid rising tensions between the United States and China over the origin of coronavirus.
After U.S. President Donald Trump threatened to impose new tariffs on Beijing in retaliation over the coronavirus outbreak, U.S. Secretary of State Mike Pompeo said on Sunday there was "a significant amount of evidence" that the new coronavirus emerged from a laboratory in China's Wuhan region.
Japanese and Chinese markets were closed for public holidays. Hong Kong's Hang Seng index plunged 4.18 percent to 23,613.80 as the U.S. death toll from the coronavirus topped 67,000 on Sunday.
Australian markets reversed an early slide to end sharply higher for the day.
The benchmark S&P/ASX 200 climbed 73.90 points, or 1.41 percent, to 5,319.80, after having fallen as much as 5 percent on Friday as U.S. President Trump threatened new tariffs on Chinese goods. The broader All Ordinaries index ended up 64.50 points, or 1.21 percent, at 5,389.50. Buy-now-pay-later firm Afterpay soared 23.80 percent after Chinese
conglomerate Tencent Holdings acquired a 5 percent stake in the company.
Westpac Banking Corp rallied 2.8 percent after the country's second-largest bank posted a 70 percent drop in first-half cash earnings, deferred a decision on its interim dividend and announced a strategic review of its underperforming wealth, pension investments and insurance unit. The other three banks rose between 1.8 percent and 2.5 percent.
Insurance Australia Group fell 2.1 percent. The company maintained its fiscal 2020 guidance, but warned it saw limited scope to pay a final dividend in September.
Energy stocks ended mixed despite falling crude prices. Mining heavyweight BHP edged up slightly while rival Rio Tinto declined 1.6 percent. Gold miners Evolution, Newcrest, Northern Star Resources and Regis Resources jumped 6-7 percent after gold prices snapped a five-day losing streak to close higher on Friday.
Investors shrugged off data showing that the total number of building permits issued in Australia fell a seasonally adjusted 4.0 percent month-on-month in March, following the 5.8 percent drop in February. Seoul stocks ended lower to snap a three-day winning streak amid an escalation of tension on the Korean peninsula. The benchmark Kospi plunged 52.19 points, or 2.68 percent, to 1,895.37 after reports the two Koreas exchanged gunfire at the demilitarized zone separating the two sides.
South Korea's manufacturing sector continued to contract in April, and at a faster rate because of the Covid-19 pandemic, the latest survey from IHS Marketing revealed today with a manufacturing PMI score of 41.6, down from 44.2 in March. Separately, a government report showed that consumer prices in the country were down 0.6 percent month-on-month in April, after a 0.2 percent gain in March.
Market bellwether Samsung Electronics lost 3 percent and No. 2 chipmaker SK Hynix gave up 3.2 percent. Automaker Hyundai Motor declined 2.2 percent while chemical firm LG Chem slumped as much as 4.4 percent.
New Zealand shares finished modestly higher after S&P Global Ratings retained the sovereign ratings of the country, saying that monetary flexibility, wealthy economy, and institutions are conducive to swift and decisive policy actions.
Although fiscal and debt profiles are temporarily deteriorating, imbalances are improving, S&P observed while affirmed the ratings at 'AA' with 'positive' outlook. The benchmark NZX-50 index ended up by 26.97 points, or 0.26 percent, at 10,475.98 after a choppy day of trading.
Malaysia's KLSE Composite index was down about 2 percent and Indonesia's Jakarta Composite was losing 2.4 percent after the release of weak manufacturing data for April.
U.S. stocks tumbled on Friday as Exxon Mobil Corp. posted its first quarterly loss in at least 32 years and sobering comments from Amazon.com Inc. and Apple Inc. fueled worries about the coronavirus pandemic's impact.
A measure of U.S. manufacturing activity plunged to a record low, Federal Reserve Bank of Dallas President Robert Kaplan warned of a "severe" contraction and President Donald Trump threatened China with tariffs over coronavirus, adding to the downbeat sentiment.
The Dow Jones Industrial Average lost 2.6 percent, the tech-heavy Nasdaq Composite plunged 3.2 percent and the S&P 500 gave up 2.8 percent.