Petrotahlil --Asian stock markets plumbed to new depths on Friday, with shares of chemical firms all in the red following another slump in US equities overnight on deepening worries over the economic toll of the coronavirus pandemic.
Global equities markets are heading for their worst week since the 2008 financial crisis as panicked investors shrugged off recent fiscal and monetary stimulus packages meant to shore up the economy.
At 04:00 GMT, Japan's benchmark Nikkei 225 Index was down 8.97%, after slumping by as much as 10% in early trade, with not one stock on the index in positive territory.
Japanese producers Asahi Kasei, Mitsui Chemicals, JXTG Holdings were all down by more than 8%.
In South Korea, trading was halted after the key KOSPI Index fell by more than 7%. Hanwha Corp was down by close to 12% during the morning session.
In Thailand, trading was also temporarily stopped as the Stock Exchange of Thailand (SET) composite index fell 10%, with shares of PTT Global Chemical falling nearly 16% at market open.
Hong Kong's Hang Seng Index was down by around 5%.
|Stock Exchange Index/Company (as of 4:00 GMT)||% Change|
|Nikkei 225 (Japan)||-8.97%|
|Asahi Kasei Corporation||-8.30%|
|JXTG Holdings, Inc.||-8.34%|
|Mitsubishi Chemical Holdings Corporation||-8.04%|
|Mitsui Chemicals, Inc.||-8.80%|
|Hang Seng Index (Hong Kong)||-5.61%|
|Sinopec Shanghai Petrochemical Company||-5.66%|
|KOSPI Composite Index (South Korea)||-7.94%|
|OCI Company Ltd||-12.73%|
|SK Innovation Co., Ltd.||-8.77%|
|LG Chem, Ltd.||-6.73%|
|Lotte Chemical Corporation||-9.71%|
|TSEC weighted index (Taiwan)||-6.23%|
|Formosa Petrochemical Corporation||-8.95%|
|Nan Ya Plastics Corporation||-8.31%|
|Formosa Chemicals & Fibre Corporation||-7.32%|
|SET Index (Thailand)||-10.71%|
|PTT Global Chemical Public Company||-12.69%|
|IRPC Public Company||-6.37%|
|Indorama Ventures Public Company||-14.43%|
|Thai Oil Public Company||-9.92%|
|STI Index (Singapore)||-4.82%|
|FTSE Bursa Malaysia KLCI (Malaysia)||-6.48%|
|SSE Composite Index (Shanghai, China)||-3.32%|
"Financial markets expressed their dissatisfaction with [US President Donald] Trump’s lack of details on fiscal stimulus and the lack of a clear strategy to cope with the health crisis that the coronavirus presents, even as the Fed [Federal Reserve] will provide $1.5 trillion in overnight operations and pledged to inject $5 trillion over the next month to combat temporary disruptions in funding markets," OCBC Bank said in a note.
Overnight, the Dow Jones Industrial Average shed 9.99%, its worst drop since the 1987 “Black Monday” market crash, when it collapsed by more than 22%.
The S&P 500 plunged 9.51%, joining the Dow in a bear market, and also seeing its worst day since 1987. The Nasdaq Composite closed 9.43% lower.
Major European markets all plunged by more than 10% on Thursday, posting their worst one-day drop in history, after Trump imposed a ban on all travel from 26 European countries for 30 days to curb the spread of the novel coronavirus. The new rules will go into effect later on Friday.
Contrary to market expectations, the European Central Bank (ECB) decided on Thursday not to cut interest rates. However, the ECB did announce measures to support bank lending and expanded its asset purchase program.
ECB President Christine Lagarde on Thursday said that the spread of the coronavirus has been a "major shock to the growth prospects of the global economy and the euro areas economy and it has heightened market volatility”.
As of 23:44 GMT on Thursday, the total confirmed cases of the coronavirus globally stood at more than 128,000, with 4,7230 deaths.
The novel coronavirus, which emerged late last year in Wuhan in China’s central Hubei province, has now spread to 114 countries and regions.
In China, the peak of outbreak in the country has passed after it reported eight new infections in Hubei province, according to its National Health Commission on Thursday. This was the first time the epicenter of the coronavirus outbreak has reported a daily total increase of confirmed cases at less than 10.
The Chinese Ministry of Commerce on Thursday said it will further expedite the export tax rebate to ease the burden on exporters in a move to stabilize foreign trade.
"In the short run, the impact [of the coronavirus] on global economy and supply chains is inevitable, and the international economic and trade growth will be pressured, which will affect the business resumption of China's foreign trade firms and their ability to secure new orders," Li Xingqian, director of foreign trade department under the commerce ministry, was quoted as saying by state news agency Xinhua.
The extended Lunar New Year holidays because of the coronavirus outbreak have disrupted China's business operations, supply chains and economic activities, leading to a slump in demand, with the country's imports and exports down by 11% year on year in first two months of 2020.
Manufacturing export centers such as Germany, South Korea, Canada and Vietnam are most at risk from the coronavirus outbreak, ICIS analyst Ann Sun said.
The "anti-globalisation trend" which has emerged in the last few past years could be disrupted by the pandemic, as global collaboration will be critical, she said.
"The recovery of supply chains and demand in a global basis will be the major topic for petrochemical industry in H2 2020," she added.
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Source : ICIS