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Asian stocks looked primed for heavy losses after U.S. equities tumbled with Treasury yields on renewed worries about the impact of the coronavirus. Gold surged with the yen and the Swiss franc.
Equity futures declined more than 2% in Japan and Australian shares opened lower. The S&P 500 Index earlier fell more than 3%, with investor confidence shaken as virus cases continued to rise across the U.S. despite efforts to contain the outbreak and its impact. The yield on 10-year Treasuries slumped to as low as 0.90% and Australian equivalents tracked those moves Friday, plumbing fresh all-time lows.
“All we know now is that we don’t really understand what’s going to happen next,” Michael Shaoul, chairman and CEO of Marketfield Asset Management LLC, told Bloomberg TV. “It’s probably four, six, eight weeks before we’re going to have any useful information as to what the trajectory of the virus is and what the actual economic fallout looks like.”
Risk assets have whipsawed this week, with traders on edge amid a rise in virus cases, governments extending quarantines and travel restrictions, and a slew of company warnings on the impact to earnings. Global equities have recovered some of the recent losses but still remain about 10% below the all-time high reached last month.
Still, some saw an opportunity in the sell-off. Action from central banks and governments will counter the economic hit from the virus, according to JPMorgan Chase & Co. strategists who had previously been telling clients to trim risky bets. The team advised boosting equity holdings.
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Elsewhere, oil fluctuated as uncertainty loomed over whether Russia would agree to OPEC’s proposal for a large production cut. Gold held its 2% overnight surge.
These are the main moves in markets:
Stocks
- The S&P 500 Index dropped 3.4%. Futures added 0.2% as of 8:04 a.m. in Tokyo.
- Futures on Japan’s Nikkei 225 fell 2.4%.
- Hang Seng futures retreated 1%.
- Australia’s S&P/ASX 200 Index lost 0.9%.
Currencies
- The yen was at 106.16 per dollar after surging 1.3% the prior session.
- The offshore yuan held at 9.9391 per dollar.
- The Bloomberg Dollar Spot Index declined 0.4%.
- The euro bought $1.1231.
Bonds
- The yield on 10-year Treasuries sank 14 basis points to 0.91%.
- Australia’s 10-year yield retreated six basis points to 0.72%.
Commodities
- West Texas Intermediate crude added 0.5% at $46.16 a barrel.
- Gold was at $1,672.02 an ounce.
— With assistance by Jonathan Ferro, Randall Jensen, and Vildana Hajric
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