Tag: resurgence

Categories
World News

Asia markets fall after Dow drops in a single day amid Covid resurgence fears

Asia markets fall after Dow drops overnight amid Covid resurgence fears

SINGAPORE – Asia Pacific stocks fell in trading Tuesday morning after Wall Street stocks tumbled overnight, with the Dow Jones Industrial Average plummeting more than 700 points.

In Japan, the Nikkei 225 lost 0.63% while the Topix index lost 0.79%. South Korea’s Kospi lost 0.31%.

Mainland stocks were lower in early trading, with the Shanghai composite falling 0.56% while the Shenzhen component lost 0.18%. Hong Kong’s Hang Seng index was near flattening.

The S & P / ASX 200 in Australia lost 0.37%.

MSCI’s broadest index for Asia Pacific stocks outside of Japan was down 0.19%.

On Tuesday, China left its corporate and household credit benchmark rate unchanged – the one-year loan prime rate (LPR) remained constant at 3.85%, while the five-year LPR was also left at 4.65%. According to Reuters, the majority of traders and analysts in a quick poll expected that both the one-year and five-year LPR would not change.

The markets in Indonesia, Malaysia and Singapore are closed on Tuesday for public holidays.

CNBC Pro’s Stock Picks and Investment Trends:

Wall Street decline

Overnight in the States, the Dow Jones Industrial Average fell 725.81 points to 33,962.04 while the S&P 500 lost 1.59% to 4,258.49 points. The Nasdaq Composite fell 1.06% to 14,274.98.

The losses on Wall Street came as concerns grew over the potential impact of a Covid resurgence on the global economic recovery. Several countries in Southeast Asia are struggling with infection resurgence, and Goldman Sachs recently lowered its 2021 growth projections for most of the region.

Currencies and oil

The US dollar index, which tracks the greenback versus a basket of its competitors, hit 92.849 after a recent rebound from below 92.8.

The Japanese yen was trading at 109.48 per dollar, stronger than levels above 110.5 against the greenback last week. The Australian dollar changed hands at $ 0.7339, up from $ 0.738 yesterday.

Oil prices were higher on the morning of Asian trading hours, with international benchmark Brent crude oil futures rising 0.52% to $ 68.98 a barrel. US crude oil futures rose 0.74% to $ 66.91 a barrel.

Categories
Health

Provide chains could return to China amid Covid resurgence in India, Vietnam

Supply chains may return to China amid Covid resurgence in India, Vietnam

The Covid-19 resurgence in some parts of Asia could lead to a change in fortunes for China, according to an economist.

Previously, the U.S.-China trade war caused companies to move their supply chains out of China, shifting their production and distribution networks for products and services. As a result, countries like Vietnam and India benefited as companies moved to set up shop in their countries.

But the situation appears to be changing, and supply chains could pivot back to China as cases spike in India and Vietnam, according to Zhang Zhiwei, chief economist at Pinpoint Asset Management.

Read more about China from CNBC Pro

“Before the pandemic, we saw factories moving out of China — Samsung, Foxconn these big name companies — setting up factories in Vietnam, India,” he told CNBC’s “Street Signs Asia” on Monday.

The spike in cases in those two countries has forced factories owned by Taiwanese contract manufacturer Foxconn, a major Apple supplier, to shut down facilities in India and Vietnam, he said.

“This could put the relocation of supply chains on hold for quite some time. The key issue here is that international travel is suspended, so multinational companies can’t send their staff to India and Vietnam to set up new factories,” Zhang added.

Cases in India surged to record-breaking highs in April and shows little signs of abating significantly —economists have predicted the South Asian economy will likely contract this quarter.

In Vietnam, the northern province of Bac Giang on Tuesday ordered four industrial parks — including three that house production facilities of Taiwan’s Foxconn — to temporarily shut down due to an outbreak of Covid-19.

The situation could benefit China, Zhang suggested. However, he pointed out that the extent of how much China could stand to gain will depend on how long the situation in India and Vietnam continues for.

Right now, export growth in China is between 20% to 40% a month, he said. If the factories in India and Vietnam return to production very soon, China’s exports would be expected to slow down in the second half of the year as companies move their manufacturing to those two countries.

“But if supply chain (in India and Vietnam) is disrupted for a long time, we could see this kind of 20%, 30% export growth (in China) to continue into next year,” Zhang said.

Categories
World News

Covid resurgence in Japan, South Korea may hit Asia’s financial restoration

Covid resurgence in Japan, South Korea could hit Asia's economic recovery

Snow falls as people wearing face masks walk through the Asakusa district on March 29, 2020 in Tokyo, Japan.

Tomohiro Ohsumi | Getty Images

SINGAPORE – Towards the end of 2020, many investors are viewing Asia as the region with one of the best economic prospects for the next year as the coronavirus outbreak can be relatively better controlled.

However, a recent surge in Covid cases in some countries threatens to dampen the region’s economic outlook, some analysts have warned.

“For some of the Asian giants, this year’s problems with Covid-19 are unlikely to get better when the clock strikes 12 noon on New Year’s Eve,” said research firm Pantheon Macroeconomics.

However, many parts of Asia – where the virus first appeared – remain lower than in Europe and the US, data from Johns Hopkins University showed.

For some of the Asian giants, this year’s Covid-19 problems are unlikely to get better when the clock strikes 12 noon on New Year’s Eve.

But some countries are now struggling with a far worse resurgence than they did earlier in the pandemic. Even areas that have made great strides in containing the virus may not be spared. Taiwan this week reports its first locally transmitted case since April 12 – underscoring the difficulty in eradicating Covid.

Here’s a look at the Asian economies grappling with a renewed spike in coronavirus infections and how that would affect their economic prospects.

Japan

  • Covid-19 balance sheet: 207,007 cumulative confirmed cases and 2,941 deaths as of Wednesday, according to Hopkins data.

The number of daily reported coronavirus infections in Japan rose again in November and topped 3,000 for the first time last week, Hopkins data showed.

According to Reuters, medical groups in the country warned the pandemic will put a significant strain on the health system. However, Japanese Prime Minister Yoshihide Suga has failed to declare a state of national emergency – although he said he was suspending a travel subsidy program to slow the spread of the coronavirus, the news agency reported.

Economists at Pantheon Macroeconomics wrote in a Wednesday report that the Japanese government’s “relatively soft” rules on social distancing don’t appear to be working and that this could lead to tougher measures in the coming months.

“Therefore, a second and more effective nationwide state of emergency in Japan early next year cannot be ruled out,” the economists said. That would weigh on Japan’s economy in the first quarter of 2021, they added.

South Korea

  • Covid-19 Record: According to Hopkins, there were 53,533 cumulative confirmed cases and 756 deaths on Wednesday.

As in Japan, the daily incidence in South Korea reached unprecedented levels this month – above 1,000 for the first time since the outbreak.

But unlike in Japan, the government in South Korea has taken a tougher stance in response to the new wave of Covid cases.

The government on Tuesday announced a nationwide ban on gathering five or more people and ordered the closure of tourist attractions such as ski slopes and other winter sports facilities, Yonhap news agency reported.

This move, according to Pantheon Macroeconomics, would allow most of South Korea’s economic damage to be contained, for the most part, in the fourth quarter of this year.

Malaysia

  • Covid-19 balance sheet: 98,737 cumulative confirmed cases and 444 deaths on Wednesday, according to Hopkins data.

The Southeast Asian country kept Covid cases to a minimum before the recent surge from October, Hopkins data showed. This prompted the government to impose a new round of partial closure measures in some parts of the country.

Economists with consulting firm Capital Economics said the outlook for the Malaysian economy had become “less optimistic” this quarter, particularly in the area of ​​consumer spending.

“A second wave of the virus and the reintroduction of many restrictions on movement have reversed the sharp recovery in home consumption in the third quarter. Google’s high-frequency mobility data suggests social distancing continues to weigh on activity,” a report said Tuesday.

But the other parts of the economy – like exports – should continue to perform strongly, so the macroeconomic success of the recent resurgence is likely to be “much less” than the previous wave, the economists said.