Asian shares hold on to gains but virus keeps markets on edge

TOKYO/NEW YORK (Reuters) – Asian stocks clung to gains on Wednesday, helped by a bounce in Australian shares, but risks for equities remain large as the coronavirus pandemic rattles the underpinnings of the global economy.

E-Mini futures for the S&P 500 traded 1.39% lower in Asian trade, highlighting the cautious mood.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.23%. Australian shares jumped by 2.87%, reversing a 2% decline on Tuesday, as a slowdown in new coronavirus cases and rising iron ore prices lifted the market.

Shares in China, where the coronavirus first emerged late last year, rose 0.18%, supported by hopes the world’s second-largest economy has started to recover.

China’s factory activity improved in March after plunging a month earlier, a private survey showed on Wednesday, just scraping into positive territory and beating analysts’ expectations.

Shares in South Korea, also hit hard by the virus, rose 0.19%, but Japanese shares fell 1.05% as a rapid increase in coronavirus infections in Tokyo fueled speculation the government will place the capital on lockdown.

Wall Street tumbled on Tuesday, with the Dow registering its biggest quarterly fall since 1987 and the S&P 500 its steepest quarterly drop since a decade ago on growing evidence of the massive downturn the pandemic will incur.

U.S. economic activity is likely to be “very bad” and the unemployment rate could rise above 10% because of efforts to slow the spread of the coronavirus, Cleveland Federal Reserve Bank President Loretta Mester told CNBC.

“Investors still want to buy equities, but the coronavirus is making everyone more cautious,” said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co in Tokyo.

“There are still a lot of risks out there, but if you can identify individual shares with good dividend yields and strong financials, then you can buy at a pretty good price.”

MSCI’s gauge of stocks across the globe was little changed. The index fell nearly 22% for the quarter.

The number of coronavirus infections globally headed toward 800,000. Deutsche Bank analysts noted, however, that for two consecutive days the global growth in new cases was below 10%, having exceeded that rate for most of the past two weeks.

Health officials were much more cautious. A World Health Organization official warned that even in the Asia-Pacific region, the epidemic was “far from over.”

The dollar bounced in Asia, rising 0.28% to 107.86 yen and gaining 0.36% to $1.2375 per British pound as investors adjusted positions before the release of U.S. manufacturing data.

The dollar fell broadly on Tuesday after the U.S. Federal Reserve said it will allow foreign central banks to exchange their holdings of U.S. Treasury securities for overnight dollar loans to ease a dollar funding crunch.

The yield on the benchmark 10-year U.S. Treasury note eased slightly to 0.6554%.

U.S. crude held steady at $20.49 a barrel, but Brent crude fell 2.09% to $25.80 per barrel as the United States, Russia, and Saudi Arabia jostle over a massive oversupply of oil.

Crude oil benchmarks ended a volatile quarter with their biggest losses in history, with both U.S. and Brent futures hammered throughout March due to the pandemic and the eruption of a Saudi-Russia price war.

Global fuel demand has been cut sharply by travel restrictions due to the coronavirus. Forecasters at major merchants and banks see demand slumping by 20% to 30% in April, and for weak consumption to linger for months.

(Graphic: MSCI All Country Wolrd Index Market Cap link: here)

(Graphic: Global currencies vs. dollar link: here)

Source: Read Full Article

German zoos ask Merkel for funds to feed animals during crisis

BERLIN (Reuters) – Zoos in Germany have written to Chancellor Angela Merkel pleading for 100 million euros to help them look after their animals during the coronavirus crisis.

“Unlike other organizations, we cannot just run down our operations, our animals must be fed and looked after,” said Joerg Junhold, president of the Association of Zoos, which has 56 members in Germany plus a few in Switzerland and Austria.

Zoo costs are as high as ever but with no visitors allowed, there is zero income, said Junhold, meaning some bigger zoos were dealing with weekly losses of about half a million euros.

Berlin Zoo Director Andreas Knieriem said he had been overwhelmed by local support in the German capital but stressed that challenges were enormous.

“I am crossing my fingers that we will all soon have survived this difficult time,” Knieriem said.

On top of the financial problems, keepers at Berlin Zoo have also said some of its animals are missing visitors.

“The monkeys really enjoy watching people,” zoo spokeswoman Philine Hachmeister was quoted by the Maerkische Onlinezeitung as saying, adding seals and parrots were also stimulated by interaction with the visitors.

“It is a bit boring for them at the moment,” she said.

Source: Read Full Article

World stocks rally after Chinese data boost to close worst quarter since 2008

LONDON (Reuters) – World stocks looked set to close their worst quarter since 2008 on a brighter note on Tuesday, as strong Chinese factory data held out hope for an economic revival even as much of the rest of the world shut down to fight the coronavirus.

Stocks have rallied since the start of last week but remain down more than 20% for the quarter. European shares have had an even worst time, suffering their worst three months since 1987.

But with trillions wiped off global markets in March and policymakers responding with more than $10 trillion and counting of fiscal and monetary stimulus packages, a semblance of calm has returned this week.

Some analysts have been bold enough to call a bottom in stocks and say the lows of early last week are unlikely to be revisited.

European stocks rallied at the open. The Euro STOXX .STOXXE gained 1.7%, France’s CAC 40 .FCHI 1.15% and the German DAX GDAX 2.08%. Britain’s FTSE 100 .FTSE rose 1.8%.

That followed gains in Asia after China’s official manufacturing purchasing managers’ index (PMI) rose to 52.0 in March from a record-low 35.7 in February, topping forecasts of 45.0.

Analysts cautioned that underlying activity probably remained below par, since the improvement measured the net balance of companies reporting an expansion or contraction, but markets cheered the news.

S&P 500 futures rose 0.6% ESc1, pointing to a stronger open on Wall Street after a rally on Monday lifted the U.S. index towards a 20% gain since the lows of last week.

Despite the more positive mood, not everyone is convinced the current rally has legs.

“In spite of the significant sell-off of most growth-oriented assets since mid-February, we are concerned there is further downside ahead,” said Salman Baig, an investment manager at Unigestion.

“The violent market action should not be understated, but the underlying cause – an accelerating pandemic requiring large parts of the economy to shut down – is still with us.”

The pace of coronavirus infections globally was heading towards 800,000. But Deutsche Bank analysts noted that for two consecutive days the global growth in new cases was 10%, after being well above that for most of the past two weeks.

Health officials are much more cautious. A World Health Organization official warned on Tuesday that even in the Asia-Pacific region the epidemic was “far from over”.

“This is probably the most embarrassing statistic for the West that China could possibly release. Not only did China stop the virus with just 3,309 deaths, they also appear to have done it with just a one-month shutdown of the economy,” Charlie Robertson, the chief economist at Renaissance Capital, said on Twitter.

Some analysts dispute China’s figures, however.

OIL BOUNCES

Elsewhere, oil prices rose off the 18-year lows hit on Monday after the United States and Russia agreed to talks to stabilize energy markets.

Oil prices have been hit by a double whammy, with U.S. crude at one point falling below $20 a barrel on Monday, as the virus outbreak cut demand worldwide and Saudi Arabia got into a price war with Russia.

Brent crude LCOc1 was up 43 cents, or 1.9%, at $23.19 a barrel, after closing on Monday at $22.76, its lowest finish since November 2002. nL4N2BO131

U.S. crude Clc1 was up $1.21, or 6.0%, at $21.30 a barrel, after settling in the earlier session at $20.09, its lowest since February 2002.

The dollar rose for a second day, although the gains were more controlled than the jumps of earlier this month that put severe stress on funding markets for the U.S. currency.

The dollar, measured against a basket of currencies, was up 0.3% at 99.493 =USD.

The euro dropped 0.4% to $1.0995 EUR=EBS. Sterling slipped 0.7% to $1.2330 GBP=D3. The yen was 0.5% lower against the dollar JPY=EBS.

Analysts say investors rebalancing their portfolios at month-end and quarter-end were probably behind some of the dollar’s moves over the next 24 hours.

There was little respite for emerging-market currencies, however. The South African rand ZAR= was near record lows and Latin American currencies were falling once again.  

Bond market moves were more measured than in recent weeks. Italian government bond yields IT10YT=RR were steady before an auction of debt, amid hopes the country’s efforts to contain the spread of the coronavirus may be starting to work.

German benchmark 10-year yields rose 5 basis points to -0.474% DE10YT=RR. U.S. Treasury yields gained 2 to 4 bps, as investors sold safer bonds and bought into equities.  

Source: Read Full Article

'Cooking for heroes': Michelin-starred restaurant helps Berlin medics fight coronavirus

BERLIN (Reuters) – A Michelin-starred restaurant in Berlin forced to close its doors by the coronavirus lockdown has turned its culinary skills to helping to feed doctors, nurses, policemen and firefighters who cannot work from home.

“We are doing ‘Cooking for heroes’, that means we are cooking for people in operational professions where it’s not an option to work from home,” said Max Strohe, head chef and co-owner of Tulus Lotrek.

Restaurants, cinemas, gyms and most stores have been shut since mid-March in Germany, which has reported nearly 43,000 cases of the coronavirus and 253 deaths, in the hope of slowing the spread of the virus and easing the pressure on hospitals.

The soups, goulash and curries lovingly prepared by Strohe and his staff are helping to sustain hundreds of doctors, nurses and other medical staff at the Jewish Hospital as they treat patients with the virus.

“I saw a post from Tulus Lotrek with the hashtag ‘cooking for heroes’ and I thought, we have a lot of heroes stationed here in the operational sector, and I sent them an email,” said hospital spokeswoman Jessica Maass.

“The very next day I received an email. It was a yes, the only question was: ‘How many meals should we send you?’ and then the very next day, 400 portions of great food came to us.”

Strohe said he and his staff have been overwhelmed by “heartwarming” messages of support from those who have enjoyed the meals and from their family members.

Brigitte Seelig, deputy head of the nursing department at the hospital, said the exquisite meals provided a welcome break from hospital canteen food.

“It’s really good food – Michelin-starred food! It’s something good for once,” she said with a smile.

Source: Read Full Article

Merkel is healthy and in constant contact with cabinet: spokesman

BERLIN (Reuters) – German Chancellor Angela Merkel is well, in close contact with her cabinet and holding international talks from home, where she is self-quarantining after coming into contact with an infected doctor, a government spokesman said on Wednesday.

“The chancellor is well,” Steffen Seibert told a news conference. “She is doing her work, as I said previously, from home, she is in constant close contact with all members of the cabinet and her staff and she is also conducting international discussions from home.”

He reiterated that Merkel would undergo a series of tests, adding: “If there are developments we will tell you.”

Merkel’s initial test for coronavirus came back negative, her spokesman said on Monday.

Related Coverage

  • Don't read too much into our low coronavirus death rate: German ministry

Source: Read Full Article