Coronavirus News Asia

Markets edge higher, price in gloomy jobs data


Hong Kong: Investors are trickling back into the market amid optimism that US-China tensions will subside as both sides are now saying they will commit to the trade deal despite strains caused by the coronavirus pandemic.

On Thursday US President Donald Trump said he was “watching closely” to see if Beijing would increase its purchases of US goods as agreed under the trade deal, suggesting that China may or may not keep its end of the bargain. Trump has blamed China for the coronavirus and described the pandemic as the “worst attack” ever on the United States, which rattled investors.

Sentiment has improved since then with the Stoxx Europe 600 up 0.6% and the MSCI Asia Pacific ex-Japan index climbing 1%.

Japan’s Nikkei 225 jumped 2.56% and China’s mainland’s stock index, the CSI300 benchmark, advanced 0.99%, as Asia’s two biggest economies reacted to the trade deal report.

‘It will get noisier’

“The US-China axis will likely get noisier as we get into the thick of the US election campaign,” Deutsche Bank economists said in a note. “But irrespective of recent comments, we don’t think either side would find it materially beneficial to renew a full-out tariff war, given the need in both countries to address the damage to employment and incomes that the Covid-19 outbreak has inflicted.”

Hong Kong’s Hang Seng index added 1.04%, Australia’s S&P ASX 200 rose 0.5% and Korea’s Kospi index climbed 0.89%. Indian stocks gave up some gains after Moody’s downgraded its assessment of economic growth in Asia’s third biggest economy.

“The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and financial market turmoil are creating a severe and extensive economic and financial shock,” Deutsche Bank said in its note, while lowering its GDP estimate to 0.2% in the 2020 calendar year, down from its previous forecast of 2.5%.


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