Japanese and South Korean equities tumbled after Wall Street stocks plunged the most since 1987, and Australian bond yields gained as traders continue to rush for cash.
The S&P 500 Index sank 12% Monday, erasing its gain for 2019, after President Donald Trump warned of a possible recession, with economic disruption from the coronavirus potentially extending into summer. U.S. futures fluctuated between gains and losses Tuesday, while Treasury yields edged up. The yen dipped. Crude oil traded near $29 a barrel after plunging almost 10% in New York.
“You’ve never been in a scenario where you shut down the entire economy," said Steve Chiavarone, a portfolio manager with Federated Investors. “You get a sense in your stomach that we don’t know how to price this and that markets could fall more."
The Federal Reserve and other central banks have dramatically stepped up efforts to stabilize capital markets and liquidity, yet the moves have so far failed to boost sentiment or improve the rapidly deteriorating economic outlook. An International Monetary Fund pledge to mobilize its $1 trillion in lending capacity also had little impact in markets.
Investors continue to clamor for massive spending packages by governments around the world to offset the pain from closures of schools, restaurants, cinemas and sporting events. Companies around the world have scaled back activity to accommodate government demands to limit social interaction.
In the latest attempts to stem the spread of the virus, Trump said Americans should avoid gathering in groups of more than 10 people and stop eating out at restaurants and bars. The San Francisco Bay Area is requiring people to stay home except for essential needs. Canada shut its border to most foreigners as cases worldwide top 169,000 worldwide and deaths exceed 6,600.
These are the main moves in markets:
- Topix Index plunged 2.7% as of 9:10 a.m. in Tokyo.
- S&P 500 futures were up 0.7% after the index plumetted 12% Monday.
- Kospi Index tumbled 3.4%.
- Australia’s S&P/ASX 200 rose 0.6%.
- Hong Kong’s Hang Seng Index futures fell 2% earlier.
- The yen fell 0.4% to 106.21 per dollar after strengthening 1.7%.
- The offshore yuan was at 7.0147 per dollar.
- The euro fell 0.2% to $1.1162.
- The yield on 10-year Treasuries rose three basis points to 0.75% after declining 24 basis points Monday.
- Australia’s 10-year bond yield rose eight basis points to 0.99%.
- West Texas Intermediate crude rose 1.7% to $29.18 a barrel after sliding 9.6%.
- Gold dipped 0.6% to $1,506 an ounce.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.