Asian markets sink as pandemic deaths soar

Negative mood fuelled by failure of US lawmakers to agree on trillion-dollar package

HONG KONG/ KARACHI: Asian markets were hammered on Monday despite massive economic stimulus efforts worldwide, with investors spooked by the relentless march of the coronavirus pandemic.

The negative mood was fuelled by the failure of US lawmakers to agree on a trillion-dollar emergency package to help the reeling American economy.

The global death toll from the virus has surged past 14,400, with nearly a billion people confined and non-essential businesses shut in dozens of countries and growing fears about a recession.

Wellington nosedived 7.6% as New Zealand announced a four-week lockdown to stop the spread of the coronavirus.

The Hang Seng Index in Hong Kong ended the day down 4.9%, Sydney dropped 5.6%, Shanghai shed 3.1% and Taiwan was off by 3.7%. Singapore tanked 7.5%, Jakarta lost 3.8% and Seoul was down 5.5%.

Tokyo was the exception, closing 2% higher as a cheaper yen against the dollar boosted Japanese markets.

Nikkei heavyweight SoftBank Group said it would sell up to $41 billion in assets to finance a stock buyback, reduce debt and increase its cash reserves, boosting its share price by more than 18% in the last hour of trade.

The grim trend continued when European markets opened. In early trade, London tumbled 4.8%, Frankfurt lost 4.6% and Paris was down 4.4%. Economists and analysts are now worried about how deep the impact of the pandemic could be on the global economy, with social distancing measures and lockdowns dealing serious blows to many industries.

Airlines have been hit particularly hard, with isolation measures shutting down routes and grounding fleets worldwide.

Long-haul giant Emirates announced a two-week suspension of all its passenger flights, following a UAE government directive.

Singapore Airlines, meanwhile, said it would ground most of its fleet until the end of April. The carrier said it was facing the greatest challenge in its existence.

“These rapid and unprecedented downgrades illustrate just how fast we’ve moved from a brief health care to a full-blown global recession,” said AxiCorp Global Chief Markets Strategist Stephen Innes.

Agreeing with Innes, KPMG Chief Economist Constance Hunter told Bloomberg TV, “It’s a health crisis that’s started morphing into a financial crisis.”

US senators failed to agree on a trillion-dollar proposal to rescue the American economy on Sunday, as Democrats said the Republican plan failed to provide sufficient protection to millions of workers or shore up the critically under-equipped healthcare system.

The bill proposed an estimated $1.7 trillion or more in funding to cushion the blow from the pandemic for American families and thousands of shuttered or suffering businesses.

The failure is likely to extend the gloom on Wall Street, where the three main indices all went into the weekend on Friday in negative territory. On oil markets, Brent crude sank 4.5% and West Texas Intermediate was down 0.25%.

Oil has faced increased volatility in recent weeks not only because of coronavirus-fuelled worries about demand, but also because of a price war between top producers Saudi Arabia and Russia.

Published in The Express Tribune, March 24^th, 2020.

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