Stocks Tumble as Fear Envelops Asia; Yen Rises: Markets Wrap

(Bloomberg) — The global slide in equity markets showed no signs of easing Friday, with Hong Kong, China, Japan and Australia all losing more than 2% amid fears about the coronavirus. The rally in sovereign bonds took a breather after yields hit record lows.

Japan’s Topix Index fell as much as 3.2% after the biggest tumble for U.S. equities since 2011. Global shares are on course for the worst week since the 2008 crisis, down more than 10% from this month’s peak. Cases in South Korea now top 2,000 and Japan is shutting its schools. California is monitoring 8,400 people for signs of the virus after they had traveled to Asia. U.S. futures were flat in volatile trading. The yen edged up, and crude oil extended declines.

“Even though the market is pricing in the fear of economic issues and disease hitting the U.S., we haven’t actually seen the emergence of clusters” of virus affected people in the U.S., Steve Englander, global head of foreign exchange research at Standard Chartered told Bloomberg TV. “Once that happens we will see another sell-off.”

Downgrades to expectations for global growth keep rolling in and money markets now see three Federal Reserve interest-rate cuts this year. Bank of America predicted that the global economy will see its weakest year since the financial crisis as the virus damages demand in China and beyond. Still, a resumption in operations at coffee shops and hotels from the likes of Starbucks Corp. and Marriott International Inc. shows that China’s economy is starting to come back online.

Meantime, U.S. health authorities moved to greatly expand the number of people who will be tested for the coronavirus. The virus is also spreading through the Middle East and further into Europe. In Africa, Nigeria confirmed its first infection.

These are the main moves in markets:

Stocks

-- Japan’s Topix index lost 3.2% and the Nikkei 225 declined 3.5% as of 11:35 a.m. in Tokyo.

-- The S&P 500 Index lost 4.4% on Thursday. Futures added 0.1%.

-- Hong Kong’s Hang Seng index slid 2.4%.

-- The Shanghai Composite retreated 2.5%.

-- South Korea’s Kospi index fell 2.5%.

-- Australia’s S&P/ASX 200 Index declined 2.5%.

Currencies

-- The yen rose 0.3% to 109.30 per dollar.

-- The offshore yuan traded flat at 7.0119 per dollar.

-- The euro was at $1.0989, +0.1%.

Bonds

-- The yield on 10-year Treasuries remained at 1.26%.

-- Australia’s 10-year yield remained at 0.85%.

Commodities

-- West Texas Intermediate crude declined 1.5% to $46.39 a barrel.

-- Gold held at $1,643 an ounce.

Contact editor Yang Ge (geyang@caixin.com)