Asian stocks: Doubts over oil recovery, coronavirus crisis weigh on markets
- Asian equities remain under pressure amid the pre-NFP trading lull.
- Washington extends lockdown, Wuhan Chief cites risk of coronavirus resurgence.
- US President Trump repeated ‘hopes’ for an oil production cut.
- ADB cuts China’s GDP forecast, Moody’s slash for Japan.
Asian stocks part ways from Thursday’s Wall Street close as risk-tone heavies during the early Friday. Fresh doubts over the US President Donald Trump’s claim of brokering an oil production deal as well as coronavirus woes keep the Asian share traders depressed amid the pre-NFP time.
Following Thursday’s comments from Russian spokesperson, US President Trump’s reiteration of the ‘hope’ that Saudi Arabia and Russia agreeing over 15 million barrels per day of output cut remain skeptical.
On the other hand, the coronavirus crisis renewed pressure on the risk-tone as Communist Party Secretary of China's Wuhan says the risk of coronavirus resurgence in the city is still high. Further, Washington extended the lockdown period.
Additionally, Asian Development Bank (ADB) slashes China’s 2020 GDP forecast to 2.3% versus 5.2% previous estimate whereas the global rating giant Moody’s expects Japan’s GDP to contract by 2.4% in 2020. Elsewhere, S&P affirms the US AA+ credit rating with a stable outlook.
Amid all this, the US 10-year treasury yields drop four basis points (bps) to 0.59% while MSCI’s index of Asia-Pacific shares outside Japan drops near 0.40% by the press time. Further, Japan’s NIKKEI recently bounced off the negative territory after Liberal Democratic Party (LDP) said he has agreed with PM Shinzo Abe to offer 300,000 yen in cash payments per household that suffers a certain degree of income declines from coronavirus pandemic.
The economic calendar flashed higher than expected figures of China’s Caixin Services PMMI and Japan’s Jibun Bank Services PMI but failed to keep traders hopeful.
Market players now await March month's employment data from the US with ISM Non-Manufacturing surprising awaited more due to survey proximity with the US coronavirus outbreak.