Asian stocks rose, but economic woes could limit gains

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NEW YORK (Reuters) – Asian stocks should rebound modestly Tuesday as US equity futures edged up, although fears that the coronavirus will weigh on the global economy for months should dampen confidence investors.

FILE PHOTO: Passers-by wearing protective masks after a coronavirus epidemic (COVID-19) are reflected on a screen displaying stock prices outside a brokerage house in Tokyo, Japan, March 17, 2020. REUTERS / Issei Kato

E-Mini futures for the S&P 500 ESc1 rose 0.3%, while Nikkei NKc1 futures reported an opening gain of around 70 points.

All eyes will be on China’s trade data, which will be released on Tuesday, which is expected to post a 14% drop in exports in March compared to a year ago, as the coronavirus closes businesses around the world, crippling demand and economic growth.

Indeed, some analysts say any optimism about signs of a peak in the hard-hit cities is quickly outweighed by the fear that it will be some time before businesses recover.

“Signs of a peak in the epidemic – or at least a slowdown in some regions – have begun to turn the question of when activity restrictions can be relaxed,” JPMorgan analysts said in a statement. note.

“Below the unlikely short-term event of a vaccine or significant collective immunity, restarting economies … can be difficult,” analysts said.

Wall Street indices finished mixed Monday, the Dow and the S&P 500 falling while a 6.2% gain in Amazon stocks helped the Nasdaq to finish higher.

In Asia, a predicted trade collapse in China will bolster the view that the world is heading for a global recession this year, despite an unprecedented surge in policy makers’ growth in the past two months.

Many analysts already expect the second-largest Chinese economy to contract sharply in the March quarter for the first time since at least 1992. China releases gross domestic product data first quarter April 17.

Elsewhere, the UK finance minister told colleagues that the UK economy could contract by up to 30% this quarter due to the shutdown of the coronavirus which has shut down businesses.

Another sign of concern about falling global demand is that oil prices have barely reacted to a global deal to cut production by a record 10% of world supply. US crude CLc1 rose only 39 cents to $ 22.8, well below its January peak of $ 63.27.

A nervous market has helped XAU = gold prices to reach new heights for more than seven years at $ 1,718.46 an ounce.

In the United States, which has registered the highest number of victims of the virus in the world, President Donald Trump said on Monday that his administration was on the verge of carrying out a plan to reopen the American economy, even if some state governors have signaled that they are responsible for the decision to restart the businesses.

The dollar continued to expand losses thanks to the new massive lending program by the Federal Reserve. The dollar = USD index fell 0.105%, while the Japanese yen JPY = remained stable against the greenback at 107.68 per dollar. The EUR = euro also changed little against the dollar at $ 1.0917.

The 10-year benchmark US10YT = RR US Treasury bill yield increased slightly to 0.7697%.

Report by Koh Gui Qing; Editing by Sam Holmes

Our standards:Principles of the Thomson Reuters Trust.

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