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Asian Shares Mixes After IMF Issues Warning

The Australian share market finished lower on Thursday with most of the selling pressure coming from weakness in the major banks. Traders said the sell-off was fueled by comments from the International Monetary Fund (IMF), calling for governments to enact wartime measures to fight the coronavirus pandemic.
James Hyerczyk

The major Asia-Pacific stock indexes finished mixed on Thursday as investors primarily followed Wall Street’s lead from the previous session. Global investors continued to feel the pain from the coronavirus pandemic while awaiting the release of the U.S. Weekly Jobless Claims report at 12:30 GMT and the start of U.S. earnings season later this month.

On Thursday, Japan’s Nikkei 225 Index settled at 17818.72, down 246.69 or -1.37%. Hong Kong’s Hang Seng Index finished at 23280.06, up 194.27 or +0.84% and South Korea’s KOSPI Index closed at 1724.86, up 39.40 or +2.34%.

In China, the Shanghai Index settled at 2780.64, up 46.12 or +1.69% and Australia’s S&P/ASX 200 Index finished at 5154.30, down 104.30 or -1.98%.

Asian Stock Valuations Drop to 15-Month Low in March:  Refinitiv Data

Asian equities valuations dropped to their lowest level since December 2018 at the end of March, following accelerated selling of regional shares by global investors on worries that extended factory shutdowns would lead to depressed profits this year.

The 12-month forward price-to-earnings (P/E) ratio, for MSCI’s broadcast index of Asia-Pacific shares, fell to 11.79 at the end-of-March, compared to 14.19 at the end of last year, according to Refinitiv data. By Wednesday’s close, the index was 23.5% lower from its January high of 175.13.

Many corporations are warning about a hit to their earnings this year as the virus outbreak has disrupted supply chains and business activities around the world.

Victor Carlstrom, chairman of investments firm Vinacossa Enterprises, said he would wait for some more weeks before buying Asian shares despite valuations being very attractive.

“If I had already sold, I would definitely not buy back before we have the facts,” Carlstrom said.

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Banks Drag Australian Market Lower

The Australian share market finished lower on Thursday with most of the selling pressure coming from weakness in the major banks. Traders said the sell-off was fueled by comments from the International Monetary Fund (IMF), calling for governments to enact wartime measures to fight the coronavirus pandemic.

Australian shares slumped nearly 4 percent as the coronavirus death toll rose in the United States and New Zealand told banks to freeze dividend payouts.

Bank stocks started to fall after the Reserve Bank of New Zealand (RBNZ) said that local banks cannot redeem short-term corporate bonds or pay dividends on ordinary shares to investors, in order to preserve capital.

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