Asia markets slip as investors await key China data signalling its progress in digging out of coronavirus turmoil

      Published on Monday, 13 April , 2020      92 Views     

  • China Business

Asia stocks slipped Monday in guarded trading, as investors weighed a significant oil deal to reduce output and waited for key China data due later this week that will offer signs about how the world’s second-largest economy in digging itself out of upheaval caused by the coronavirus.

Hong Kong was among markets closed for the Easter holiday. US futures pointed lower.

Oil and the virus were driving sentiment.

Top oil producers agreed to cut petroleum output by one-tenth, following a Saudi-Russia price war launched amid already depressed demand due to the coronavirus pandemic.

The deal evolved out of talks involving the OPEC + members and the Group of 20 nations. Brent crude prices rose about 4 per cent.

Meanwhile, on the coronavirus front, the US now has the world’s largest number of deaths – more than 22,000 – and warning signs are emerging of a threat to its meat supply. Smithfield Foods, the world’s largest pork processor and owned by Hong Kong-listed WH Group, temporarily shut down its large plant in the state of South Dakota after about one in 15 of its workers came down with the virus. As happened in China earlier, the supply chain is being disrupted, with some slaughterhouses closed due to the virus, meaning the link from farmers to consumers is being affected.

The world’s coronavirus death toll is about 114,000. The pandemic has pushed the global economy into recession, led to massive business disruption, and put about one-half of the world’s population under lockdown.

The outbreak began in China, which launched then-unprecedented lockdowns to contain the virus. Now, China’s factories are firing back up, with the semiconductor industry among those favoured by analysts.

March economic data from exports to industrial production and retail sales will this week give investors the first reading of how China’s economy is recovering from the pandemic damage after months of lockdowns.

The Shanghai Composite Index on Monday dropped 0.5 per cent to 2,787.28 as of 1:30pm local time, while the ChiNext gauge of smaller companies fell 1.8 per cent, as agricultural and electronics companies bore the brunt of selling.

“Asia will be focused this week on China’s Balance of Trade tomorrow, and its Q1 GDP on Friday. Markets are looking for a bounce back in the BoT … a continuation of the improvements in China’s data as the country continues its post-COVID-19 reopening. GDP, though, is expected to shrink for the quarter by 6.2 per cent,” Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA, wrote in a fresh note.

Category China Business | 2020/04/13 latest update at 8:07 AM
Source : SCMP | Photocredit : Google
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