Beijing: Asian stock markets fell further on Wednesday as oil prices recovered some record declines due to growing concerns about the coronavirus pandemic on the economy.
After Wall Street suffered the biggest drop in weeks, benchmark indexes in Tokyo, Hong Kong, and Southeast Asia fell, while Shanghai changed little.
Benchmark US crude oil fell, but it is still close to this week’s historical lows. The international standard Brent crude oil fell further. This drop is disturbing to investors because it adds to the evidence of the depth of the global economic downturn, factories are idle, and consumers are ordered to stay at home.
Hayaki Narita of Mizuho Bank said in a report that the plunge in oil prices “aroused widespread concern about a sharp economic slowdown.”
Global oil demand will fall to levels in the mid-1990s. Producers cannot slow down production speed fast enough. There is not enough space in the storage box.
Tokyo’s Nikkei 225 index fell 1.2% to 19,050.33, and the Hong Kong Hang Seng Index fell 0.7% to 23,626.04. The Shanghai Composite Index fell 2 points to 2,824.91.
Kospi in Seoul fell 1% to 1,861.04 points, and S & P-ASX 200 in Sydney fell 0.7% to 5,185.10 points.
New Zealand’s main index fell 1.4% and Singapore fell 1.3%.
In electronic trading on the New York Mercantile Exchange, the US benchmark barrel price for June delivery fell 23 cents to $ 12.34. The previous trading day fell 43% to $ 11.57.
On Monday, the U.S. barrel price delivered next month fell below zero. This means that traders need to pay others to take it away from their hands, so that they do not need to find a place to store the surplus surplus.
The price of oil delivered in June did not fall to zero, partly because the pressure on storage was not great.
Brent crude oil, the standard for international oil prices, fell 76 cents in London to $ 18.57 per barrel. On Tuesday, the stock fell 24.4% to $ 19.33.
AxiCorp’s Stephen Innes said in a report: “The global market is struggling with temporary but overwhelming decline in demand.” He said that the June contract may also “become a storage infrastructure Saturated victim. “
On Wall Street, the S & P 500 index fell 3.1% to 2,736.56.
About 94% of stocks in the index fell. This includes winners in the new family economy. Netflix fell 0.8% after it announced its quarterly results, which included a 23% increase in global membership.
The Dow Jones Industrial Average fell 2.7% to 23,018.88. The Nasdaq index was 3.5% to 8,263.23.
Treasury yields fell further, indicating that investors are transferring more funds to bonds as a safe haven. The yield on the 10-year US Treasury bond (that is, the difference between the market price and the buyer ’s return to the maturity date of the bond purchase) fell to 0.55% from 0.62% later on Monday.
Also on Tuesday, the US Senate approved a virus assistance bill worth nearly $ 500 billion. It will provide more loans to small businesses and provide assistance to hospitals.
At the same time, the governor of Georgia announced plans later on Monday to allow gyms, hair salons and other businesses to reopen as early as Friday.
Despite this, economic data is still bleak. A report on Tuesday showed that since 2015, sales of prior homes in the United States have fallen the most.
Pessimists say that the market rebound is overdone, and premature economic opening may only lead to more outbreaks of infectious diseases.
The exchange rate of the dollar against the yen rose from 107.68 yen on Tuesday to 107.75 yen. The euro was flat at 1.0853 against the dollar.