Markets Mixed as Toughest Quarter Since 2008 Draws to a Close
March 31 2020 - 03:55AM
Dow Jones News
By Joanne Chiu
U.S. stock-index futures inched down, and equity markets in the
Asia-Pacific region were mixed, while oil prices crept higher after
registering fresh multiyear lows.
With trading under way for the last day of March, global stocks
were poised to close out their worst quarter since the depths of
the global financial crisis, with the coronavirus pandemic chilling
economic activity and rattling investor confidence.
European markets opened higher Tuesday. The pan-continental
Stoxx Europe 600 rose 1.6%, while other major regional benchmarks
also climbed: the German Dax rose 1.9% and the French CAC 40 rose
1.7%.
Yields on European sovereign bonds also mainly climbed in what
some analysts said was a sign of easing pressures on financial
market conditions following policy interventions from central banks
and governments.
The German 10-year benchmark bund rose to negative 0.487%
Tuesday from negative 0.538%.
S&P 500 futures fell 0.2% in afternoon trading Tuesday in
Hong Kong, reversing earlier gains. The yield on the 10-year U.S.
Treasury note, a security that is seen as a haven, rose to 0.685%,
according to Tradeweb, from 0.667% Monday. Yields move in the
opposite direction of prices.
Some regional markets rallied. New Zealand rose more than 2%
while South Korea's Kospi Composite gained 1.5%. Hong Kong's Hang
Seng Index advanced around 0.7%.
Elsewhere, performance was weaker. China's Shanghai Composite
was little changed, Japan's Nikkei 225 shed 0.9% and Australia's
benchmark index erased earlier gains to close 2.2% lower.
Tai Hui, chief market strategist for Asia Pacific at J.P. Morgan
Asset Management, said many investors were in a wait-and-see mode,
as the U.S., Europe and many Asian countries have rolled out very
sizable fiscal stimulus packages. "Whether we need more depends on
whether the pandemic will force a longer period of social
distancing and lockdown,' he said.
The decline in Sydney helped the S&P/ASX 200 conclude its
worst-ever quarter, FactSet data showed, dropping more than 24%.
The Nikkei 225 and the Kospi, which both lost about 20% in January
through March, recorded their worst quarterly performance since
2008.
Gauges of business activity showed factories, service industries
and construction rebounded in China in March. The official
manufacturing purchasing managers index rose to 52.0 in March, up
from a record low of 35.7 in February, and slightly ahead of
consensus forecasts. The 50 mark separates expansion from
contraction.
However, China's statistics bureau said the reading only
reflects work resumption from February and it doesn't mean economic
activity has returned to normal. The equivalent measure for
nonmanufacturing industries rose to 52.3.
"The challenge has shifted from supply chains and domestic
demand to external demand as the U.S. and Europe are going through
probably their deepest contraction in history in the next few
months," said Mr. Hui. "That is going to have a knock-on effect on
Chinese exports."
The Dow Jones Industrial Average and S&P 500 both rose more
than 3% on Monday, with news on progress of medical measures to
combat the novel coronavirus helping lift some stocks. Abbott
Laboratories said U.S. authorities had approved an emergency-use
coronavirus test, while Johnson & Johnson said it had made
progress on a vaccine to prevent Covid-19, the disease caused by
the virus.
West Texas Intermediate, the main U.S. crude gauge, rebounded
more than 6.5% to $21.39 a barrel, after it settled at an 18-year
low Monday. Brent crude, the global oil benchmark, rose 2.9% to
$27.19 a barrel.
The WSJ Dollar Index, which tracks the greenback against 16
other currencies, was little changed at 93.82. It has declined
about 2.6% in the last five days as a surge in demand for dollars
has abated.
Write to Joanne Chiu at joanne.chiu@wsj.com
(END) Dow Jones Newswires
March 31, 2020 03:40 ET (07:40 GMT)
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