Asian stocks set to drop as economic worries mount

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(April 2): Stocks in Asia looked primed for more declines, following steep losses on Wall Street, as countries moved to implement more stringent measures in a bid to contain the coronavirus. Treasuries climbed with the dollar.

Futures in Japan and Hong Kong were lower after the S&P 500 lost more than 4% though futures on the gauge opened higher in Asia. France and Spain reported another increase in fatalities, while Italy and Germany moved to extend lockdown measures and Florida ordered people to stay home. New York Governor Andrew Cuomo said a model showed the Covid-19 outbreak may not peak in the state until the end of April.

“The incremental news on the virus in the last 24 to 48 hours has been disappointing,” John Porter, a fund manager at Mellon Investments Corp., told Bloomberg TV. “The global economy has hit a wall, there’s a tremendous amount of uncertainty, and that’s contributing to the volatility in the markets and the downward trajectory we’ve seen the last few days.”

Last week’s rally in global equities is giving way to renewed selling as companies move to slash dividends and more U.S. states enact severe restrictions on people movement. Germany is extending its natiowide lockdown for another two weeks, until April 19. The S&P 500’s decline accelerated on Wednesday after U.S. intelligence sources said China concealed the extent of the virus outbreak.

“The biggest economic hit on a monthly basis will likely be in the month of April,” Abby Joseph Cohen, advisory director and senior investment strategist at Goldman Sachs, told Bloonberg TV. “This is going to be a rolling health crisis in the U.S.”

Elsewhere, West Texas oil jumped above $21 a barrel after President Donald Trump’s pledge to meet with feuding producers Saudi Arabia and Russia to support the market failed to bolster prices substantially.

These are the main moves in markets:

    S&P 500 futures rose 0.6% as of 7:02 a.m. in Tokyo. The S&P 500 fell 4.4%.
    Futures on Japan’s Nikkei 225 lost 1.7%.
    Hang Seng Index futures declined 1.4%.
    Futures on Australia’s S&P/ASX 200 Index slid 3.2%.


    The yen was at 107.13 per dollar.
    The offshore yuan traded at 7.1233 per dollar.
    The euro bought $1.0950, down 0.1%.


    The yield on 10-year Treasuries dropped nine basis points to 0.58%.
    Australia’s 10-year bond yield was steady at 0.68%.


    West Texas crude rose 4.7% to $21.27 a barrel.
    Gold was little changed at $1,590.69 an ounce.

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