Coronavirus News Asia

Markets get the chills after Trump warning

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HONG KONG: Asian markets slid on Monday after rising tensions between the world’s two largest economies. A report said US President Donald Trump may block a government retirement fund from investing in Chinese equities on grounds of national security, while US Secretary of State Mike Pompeo said on Sunday “enormous evidence” showed the new coronavirus originated in a lab in China.

The market moves were exaggerated in thin trade as China and Japan are on holiday.

The Hong Kong benchmark the Hang Seng index dived 4.18% as trading resumed following Friday’s holiday closure with Financial Secretary Paul Chan projecting GDP will contract 4-7% in the current year.

Hong Kong suffered its worst quarterly contraction of the modern era, official figures revealed on Monday, as the coronavirus outbreak hammered an economy already laid low by months of street protests and the US-China trade war. The financial hub is now experiencing its third-straight quarter of negative growth – its longest downturn since the 2008 global financial crisis, AFP said. 

Advance figures released Monday showed an 8.9% on-year contraction in the first quarter – the worst decline since the government began compiling data in 1974. The result was a bigger fall than the 8.3% during the Asian financial crisis in 1998 and the 7.8% in early 2009.

A Moody’s Analytics forecast predicted a 6.5% decline, from the 2.9% drop in the December quarter. It said there had been a larger than expected impact from the Covid-19 outbreak. “While the economy has been successful in containing the localized spread, exports and travel and tourism have suffered significant setbacks, which, combined with the persistent issue of social unrest and weakened consumer confidence, are expected to deepen the slowdown seen through 2019.”

India also hit hard

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