Caixin
Feb 25, 2020 12:22 PM
FINANCE

Stocks Slide Eases, Treasuries Retreat; Yen Drops: Markets Wrap

People wearing protective masks ride an escalator inside a subway in Seoul. Photo: Bloomberg
People wearing protective masks ride an escalator inside a subway in Seoul. Photo: Bloomberg

(Bloomberg) — A sell-off that wiped out global stock gains for the year eased in Asia Tuesday as authorities around the world move to keep the coronavirus from spreading. Ten-year Treasury yields ticked up from near record lows.

Japan tumbled as traders came back from a holiday to catch up to the plunge in equities spurred by concerns about the potential for a global pandemic, and Australian equities fell for a second day. But U.S. futures climbed about 1%, South Korea’s Kospi advanced, and declines in Hong Kong and Shanghai were more modest than the 3%-plus downdraft — the worst since February 2018 — on Wall Street overnight. The yen retreated and crude oil stabilized after a near-4% drop Monday.

A surge in cases in South Korea and Italy, along with the disease’s spread in Japan, spooked investors Monday, but the World Health Organization has held off from calling a global pandemic. Some may also be taking encouragement from news about the development of treatments or a vaccine, even if experts warn about the time it would take to build significant stocks of medicines. Fujifilm Holdings Corp. jumped as much as 8.8% on Japanese plans to recommend its Avigan drug as a treatment.

“We’re not really sitting here and panicking,” Sam Le Cornu, chief executive of Stonehorn Global Partners told Bloomberg TV. “The virus will pass at some point, and there might even be risks to the upside with what we’re seeing from monetary policy,” he said. “We put some cash to work, so we’re fully invested. This will be a short-term blip in the scheme of things.”

Elsewhere, Italian bonds dropped Monday on concern that the spread of the coronavirus may push the economy into a recession. Italy reported at least six deaths, and Milan, the country’s financial hub, is in virtual lockdown.

These are some key events coming up:

-- Earnings keep rolling in from companies including: Home Depot Inc. on Tuesday; Peugeot SA on Wednesday; Baidu Inc., Best Buy Co. Inc., Occidental Petroleum Corp. and Dell Technologies Inc. on Thursday; and London Stock Exchange Group Plc on Friday.

-- The Democratic presidential debate in South Carolina is on Tuesday.

-- The Bank of Korea announces its policy decision on Thursday, with rising risks of an interest-rate cut.

-- U.S. jobless claims, GDP and durable goods data are out Thursday.

-- Japan industrial production, jobs, and retail sales figures are due on Friday.

 

These are the main moves in markets:

Stocks

-- S&P 500 futures rose 0.8% as of 10:20 a.m. in Tokyo. The S&P 500 Index sank 3.4% to the lowest in more than three weeks.

-- Topix index fell 2.8%.

-- Australia’s S&P/ASX 200 Index fell 1.3%.

-- Kospi index rose 1%.

-- Hong Kong’s Hang Seng Index fell 0.4%.

Currencies

-- The yen traded at 110.85 per dollar after strengthening 0.8%, the biggest increase in six months.

-- The offshore yuan was little changed at 7.0311 per dollar.

-- The euro was little changed at $1.0849.

Bonds

-- The yield on 10-year Treasuries rose two basis points to 1.39%.

-- Australia’s 10-year bond yield fell one basis point to 0.9%.

Commodities

-- West Texas Intermediate crude traded at $51.47 a barrel after sliding 3.7%.

-- Gold was at $1,653.48 an ounce, near the highest in about seven years.

Contact editor Yang Ge (geyang@caixin.com)
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