Asian stocks retreated for a second day after an overnight slump on Wall Street, as investors assess the implications of an historic tumble in crude oil prices.
Equities saw modest declines in Japan, Australia, Hong Kong and Shanghai. South Korean stocks and the won slid after CNN reported that the U.S. is monitoring intelligence that North Korean dictator Kim Jong Un is in grave danger after surgery. Futures on the S&P 500 stayed higher, following Monday’s drop from six-week highs. Treasuries ticked down.
Oil futures rose, with West Texas Intermediate June contracts at about $22 a barrel; the May contract popped back into positive territory after Mondays shock wipe-out.
This is a very interesting situation; its not something that any of us have seen before in terms of negative asset prices, Sarah Lien, Eastspring Investments client portfolio manager, said on Bloomberg TV, in relation to oil. I think the outlook is challenged, no doubt. Investors need to be cautious on the oil price.
Investors are also monitoring signs that coronavirus deaths in some parts of the world, including New York, are slowing, and some lockdowns are being eased. Meanwhile, the U.S. Congress is close to a fresh spending package to offset the pandemics effects.
The pace of earnings season is about to pick up, with almost one-fifth of S&P 500 companies reporting this week. After the close of U.S. trading, IBM reported a drop in first-quarter revenue and pulled its profit forecast for the year.
These are the main moves in markets:
Stocks S&P 500 futures rose 0.4% as of 10:57 a.m. in Tokyo.
The S&P 500 Index fell 1.8%. Topix index fell 0.7%.
Australia’s S&P/ASX 200 Index fell 0.7%.
South Korea’s Kospi index fell 1.7%.
Hong Kong’s Hang Seng Index lost 1.9%.
Shanghai Composite Index fell 0.8%.
MSCI Asia Pacific index declined 1.3%.
Currencies
The Japanese yen was at 107.70 per dollar, little changed.
South Korea’s won slid 1% to 1223.60 per dollar.
The offshore yuan was at 7.0979 per dollar.
The euro traded flat at $1.0851.
Bonds
The yield on 10-year Treasuries ticked one basis point higher to 0.62%.
Australia’s 10-year bond yield rose one basis point to 0.85%.
Commodities
West Texas Intermediate crude May contract was at $1.57 a barrel after dropping into negative territory. June contract at $21.77.
Gold dipped 0.3% to $1,690 an ounce.