Asian share prices rebounded Monday after falling last week, mainland Chinese indices gaining more than 3%, with data showing progress in restoring factory production after weeks of disruption due to viral epidemic.
Stocks are gone as investors fear the coronavirus epidemic will derail the global economy. But in these declines, some see buying opportunities.
Nikkei 225 Index of Japan
NIK + 0.95%
recovered from early losses, closing up 0.9%, gaining 1% to 21,345.54 after the Bank of Japan promised to intervene to support the economy. The Shanghai Composite Index
SHCOMP, + 3.15%
increased by 3.1%. The benchmark for the small stock exchange in Shenzhen
399,106, + 3.77%,
jumped 3.8%. Kospi in South Korea
180721, + 0.78%
climbed 0.8% and the Hang Seng
HSI, + 0.62%
in Hong Kong jumped 0.6%.
Bank of Japan Governor Haruhiko Kuroda issued a statement on Monday after an early fall in share prices, saying the central bank “will closely monitor future developments and strive to provide sufficient liquidity and cash. ensure the stability of the financial markets through appropriate market operations and assets.
The BOJ released asset purchase plans for the coming weeks on Friday: the central bank already buys tens of billions of dollars in government bonds and other assets every year as part of its efforts energetic to maintain cheap credit to prevent deflation.
Shares fell in Australia, where the S&P ASX / 200
XJO, -0.77%
lost 0.8% and in Taiwan
Y9999, -1.08%
, which fell 1%. Stocks were especially higher in Southeast Asia.
US futures contracted moderately, with contract for the Dow Jones Industrial Average
YM00, + 2.09%
up 1.7% while S&P 500 futures
ES00, + 1.91%
added 1.5%.
“The information may not be as bad as it could have been,” said Oanda’s Jeffrey Halley in a comment. “Today’s rallies in Asia are resolutely focused on relief. Compared to the scale of sales last week, this morning’s rebounds are weak. “
Stocks fell on Wall Street on Friday, continuing a rout that left the market with its worst week since October 2008. Meanwhile, bond prices soared as investors sought safety, pushing yields to record levels. Monday, 10-year Treasury bill yield
TMUBMUSD10Y, -3.62%,
a benchmark for home loans and many other loans, at 1.14%, remained stable from Friday’s levels.
The Dow
DJIA, -1.39%
fell 1.4% to 25,409.36. The S&P 500
SPX, -0.82%
slipped 0.8% to 2,954.22, while the Nasdaq
COMP + 0.01%
increased 0.1% to 8,567.37.
The damage of the week of incessant sales caused a sensation: the Dow Jones Industrial Average fell by 3,583 points, or 12.4%. Microsoft
MSFT, + 2.42%
and Apple
AAPL, -0.06%
, the two largest companies in the S&P 500, lost a total of $ 300 billion. As a sign of serious concern about a possible economic blow, the price of oil fell by 16%.
Market losses eased on Friday after the Federal Reserve released a statement saying it was ready to help the economy if needed. Investors are increasingly expecting the Fed to cut rates at its next political meeting in mid-March.
The virus epidemic that began in central China has shaken markets as authorities shut down industrial centers, emptied stores and severely curtailed travel around the world. Companies are warning investors that their finances will suffer because of supply chain and sales disruptions. Governments are taking increasingly drastic measures as they strive to contain the virus.
The rout hit every major index in what market observers call a “correction,” or a drop of 10% or more from a peak. The last time this happened was in late 2018, when a tariff war with China intensified. Market watchers have been saying for months that stocks are too expensive and have been waiting for another decline for a long time.
The latest losses have offset the S&P 500’s gains since October. The benchmark has always risen 6.1% in the past 12 months, excluding dividends. Its 11.5% weekly loss was the largest since a drop of 18.2% in the week ending October 10, 2008.
Bond prices rose again as investors sought security and became more pessimistic about the outlook for the economy. This has pushed yields to record levels. The yield
TMUBMUSD10Y, -3.62%
on the 10-year Treasury bill, a benchmark for home loans and many other loans, was 1.10% Monday, against 1.14% Friday and 1.30% Thursday evening. It’s a record, according to TradeWeb.
Crude oil prices also rebounded on Monday. American benchmark crude
CLJ20, + 4.02%
gained 2.8%, or $ 1.30, to $ 46.09 a barrel in ecommerce on the New York Mercantile Exchange. It fell 4.9% on Friday, worried that travel and shipping around the world would be severely wrecked, which would hurt demand for energy. The price of the benchmark US crude oil dropped 15% last week.
Brent crude
BRNJ20, -0.04%
, the international standard, jumped 2.6% to $ 51.37 per barrel.
The virus hit China in December and shut down large swathes of that nation in late January. China is still the hardest hit country with most of the 86,000 cases worldwide and related deaths. Its spread far beyond China sowed panic and dashed hopes of containment.
Nearly 60 countries representing all continents, except Antarctica, have confirmed cases.
The latest data shows that the Chinese manufacturing sector plunged in February as virus scans closed much of the world’s second largest economy.
A monthly purchasing managers’ index published on Monday by Caixin magazine fell to 40.3 from 51.1 in January on a 100-point scale on which figures below 50 show a contraction in activity. A separate PMI released on Saturday by the National Bureau of Statistics and the China Logistics and Purchasing Federation fell to 35.7 from 50 in January.
Despite the plunge, business confidence peaked in five years after the ruling Communist Party launched efforts to revive the industry with tax cuts and other aid, said Caixin.
“The manufacturers were confident that production would increase over the next year,” the magazine said in a statement.
The dollar
USDJPY, + 0.10%
rose to 108.49 Japanese yen from 108.07 yen on Friday.
Asian share prices rebounded Monday after falling last week, mainland Chinese indices gaining more than 3%, with data showing progress in restoring factory production after weeks of disruption due to viral epidemic.
Stocks are gone as investors fear the coronavirus epidemic will derail the global economy. But in these declines, some see buying opportunities.
Nikkei 225 Index of Japan
NIK + 0.95%
recovered from early losses, closing up 0.9%, gaining 1% to 21,345.54 after the Bank of Japan promised to intervene to support the economy. The Shanghai Composite Index
SHCOMP, + 3.15%
increased by 3.1%. The benchmark for the small stock exchange in Shenzhen
399,106, + 3.77%,
jumped 3.8%. Kospi in South Korea
180721, + 0.78%
climbed 0.8% and the Hang Seng
HSI, + 0.62%
in Hong Kong jumped 0.6%.
Bank of Japan Governor Haruhiko Kuroda issued a statement on Monday after an early fall in share prices, saying the central bank “will closely monitor future developments and strive to provide sufficient liquidity and cash. ensure the stability of the financial markets through appropriate market operations and assets.
The BOJ released asset purchase plans for the coming weeks on Friday: the central bank already buys tens of billions of dollars in government bonds and other assets every year as part of its efforts energetic to maintain cheap credit to prevent deflation.
Shares fell in Australia, where the S&P ASX / 200
XJO, -0.77%
lost 0.8% and in Taiwan
Y9999, -1.08%
, which fell 1%. Stocks were especially higher in Southeast Asia.
US futures contracted moderately, with contract for the Dow Jones Industrial Average
YM00, + 2.09%
up 1.7% while S&P 500 futures
ES00, + 1.91%
added 1.5%.
“The information may not be as bad as it could have been,” said Oanda’s Jeffrey Halley in a comment. “Today’s rallies in Asia are resolutely focused on relief. Compared to the scale of sales last week, this morning’s rebounds are weak. “
Stocks fell on Wall Street on Friday, continuing a rout that left the market with its worst week since October 2008. Meanwhile, bond prices soared as investors sought safety, pushing yields to record levels. Monday, 10-year Treasury bill yield
TMUBMUSD10Y, -3.62%,
a benchmark for home loans and many other loans, at 1.14%, remained stable from Friday’s levels.
The Dow
DJIA, -1.39%
fell 1.4% to 25,409.36. The S&P 500
SPX, -0.82%
slipped 0.8% to 2,954.22, while the Nasdaq
COMP + 0.01%
increased 0.1% to 8,567.37.
The damage of the week of incessant sales caused a sensation: the Dow Jones Industrial Average fell by 3,583 points, or 12.4%. Microsoft
MSFT, + 2.42%
and Apple
AAPL, -0.06%
, the two largest companies in the S&P 500, lost a total of $ 300 billion. As a sign of serious concern about a possible economic blow, the price of oil fell by 16%.
Market losses eased on Friday after the Federal Reserve released a statement saying it was ready to help the economy if needed. Investors are increasingly expecting the Fed to cut rates at its next political meeting in mid-March.
The virus epidemic that began in central China has shaken markets as authorities shut down industrial centers, emptied stores and severely curtailed travel around the world. Companies are warning investors that their finances will suffer because of supply chain and sales disruptions. Governments are taking increasingly drastic measures as they strive to contain the virus.
The rout hit every major index in what market observers call a “correction,” or a drop of 10% or more from a peak. The last time this happened was in late 2018, when a tariff war with China intensified. Market watchers have been saying for months that stocks are too expensive and have been waiting for another decline for a long time.
The latest losses have offset the S&P 500’s gains since October. The benchmark has always risen 6.1% in the past 12 months, excluding dividends. Its 11.5% weekly loss was the largest since a drop of 18.2% in the week ending October 10, 2008.
Bond prices rose again as investors sought security and became more pessimistic about the outlook for the economy. This has pushed yields to record levels. The yield
TMUBMUSD10Y, -3.62%
on the 10-year Treasury bill, a benchmark for home loans and many other loans, was 1.10% Monday, against 1.14% Friday and 1.30% Thursday evening. It’s a record, according to TradeWeb.
Crude oil prices also rebounded on Monday. American benchmark crude
CLJ20, + 4.02%
gained 2.8%, or $ 1.30, to $ 46.09 a barrel in ecommerce on the New York Mercantile Exchange. It fell 4.9% on Friday, worried that travel and shipping around the world would be severely wrecked, which would hurt demand for energy. The price of the benchmark US crude oil dropped 15% last week.
Brent crude
BRNJ20, -0.04%
, the international standard, jumped 2.6% to $ 51.37 per barrel.
The virus hit China in December and shut down large swathes of that nation in late January. China is still the hardest hit country with most of the 86,000 cases worldwide and related deaths. Its spread far beyond China sowed panic and dashed hopes of containment.
Nearly 60 countries representing all continents, except Antarctica, have confirmed cases.
The latest data shows that the Chinese manufacturing sector plunged in February as virus scans closed much of the world’s second largest economy.
A monthly purchasing managers’ index published on Monday by Caixin magazine fell to 40.3 from 51.1 in January on a 100-point scale on which figures below 50 show a contraction in activity. A separate PMI released on Saturday by the National Bureau of Statistics and the China Logistics and Purchasing Federation fell to 35.7 from 50 in January.
Despite the plunge, business confidence peaked in five years after the ruling Communist Party launched efforts to revive the industry with tax cuts and other aid, said Caixin.
“The manufacturers were confident that production would increase over the next year,” the magazine said in a statement.
The dollar
USDJPY, + 0.10%
rose to 108.49 Japanese yen from 108.07 yen on Friday.