Dire Prospects for Global Economy Weigh on Major Asia-Pacific Stock Indexes

The major Asia-Pacific stock indexes finished mixed but mostly lower on Thursday as worries over the size and duration of the economic fallout from the coronavirus pandemic continued to weigh on investor sentiment. Shares throughout the region were lower with stocks in mainland China the exception, edging higher.

Shares in the region were primarily influenced by weakness in the United States in Wednesday’s session. Stateside, stocks fell after a report from the U.S. Commerce Department showed retail sales in March plunged a record 8.7% – the largest one-month decline since it began tracking the series in 1992.

On Thursday, Japan’s Nikkei 225 Index settled at 19290.20, down 259.89 or -1.33%. Hong Kong’s Hang Seng Index finished at 24006.45, down 138.89 or -0.58% and South Korea’s KOSPI closed at 1857.07, down 0.01 or -0.00%.

In Australia, the S&P/ASX 200 Index settled at 5416.30, down 50.40 or -0.92%, while China’s Shanghai Index finished at 2819.84, up 8.76 or +0.31%.

South East Asia Stocks Tumble on Bleak Economic Outlook

Most Southeast Asian stock markets ended lower on Thursday, with the Philippines index plunging 7%, as dire prospects for the global economy due to the coronavirus pandemic dented investor sentiment.

Weighing on risk appetite in the region was the International Monetary Fund predicting Asia’s economy is likely to suffer zero growth this year for the first time in 60 years.

Leading the area in losses was the Philippines benchmark index which plummeted 7.1%, wiping out three days of gains. Afterward, the Philippine central bank cut its benchmark interest rate by 50 basis points in an off-cycle move.

Australia Ends Lower Despite Late Session Rally

The Australian sharemarket closed lower on Thursday despite a small rally through the afternoon after March’s employment data came in better than expected.

In corporate news, Virgin Australia airlines has asked for trading to be suspended for seven days. The company asked the ASX to suspend its shares as it struggles to raise money to survive the coronavirus crisis. Virgin has asked the federal government for a $1.4 billion loan – but ministers are still debating how to prop up the airline industry.

Australian Employment Better – But There is a Catch

On the economic data front, Australia’s unemployment rate in March came in at 5.2% on a seasonally adjusted basis, according to data from the country’s bureau of statistics. That was better than expectations of a 5.5% unemployment rate for the month in a Reuters poll.

However, the Australian Statistics Bureau cautioned that the data on March employment covered just the first two weeks of the month – before lockdown measures to contain the coronavirus spread kicked in.