Asian stocks fell on Thursday as the analysts warned about the dire financial situation in the region. Investors are waiting for a report about the American labor market. If the news is bad, the recent rebound of European markets and U.S. stock futures may reverse the course again.
The International Monetary Fund stated that Asia would register zero growth this year due to the coronavirus pandemic. The result was a massive sell-off as investors were trying to get rid off Asian shares.
Japan’s Nikkei 225 dropped by 1.3%, while Australia’s S&P/ASX 200 fell by 1%. Hong Kong’s Hang Sang Index also declined by 0.5%. However, the Shanghai Composite was among the few gainers, rising by 0.3%.
Chang Yong Rhee, Director of the IMF’s Asia and Pacific Department, noted that this is the worst growth performance in nearly 60 years, including during the Asian Financial Crisis and the Global Financial Crisis.
Tai Hui, Chief Market strategist for Asia at J.P. Morgan Asset Management, also stated that investors will still need to adjust their expectations on corporate earnings in the next 6-12 months. That could cause the equity market’s volatility in Asia, like in the United States and Europe.
What about European and U.S. stocks?
European markets rebounded on Wednesday, opening slightly higher. The FTSE 100 rose by 0.7% in London, while France’s CAC 40 and Germany’s DAX gained 1.2%.
Chancellor Angela Merkel declared on Wednesday that Germany would gradually ease some restrictions on a business starting next week. Volkswagen also announced a phased reopening of its European plants.
The U.S. futures gained as well despite the expectations of negative employment data. Nasdaq was up 0.8%, while Dow Jones and S&P 500 each gained 0.7% on Wednesday.
During the first filing in the middle of March, nearly 17 million people have filed for initial unemployment benefits. Analysts expect Thursday’s data to show that another 5.1 million people filed for their first week of unemployment in the week ended April 11.