Coronavirus casts gloom on stocks in weak holiday trade
While most financial markets were closed for Labour Day, shares in Japan and Australia tracked Wall Street losses.
Shares declined on Friday in the few markets that remained open during the Labour Day holiday as investors began the month of May mulling gloomy economic and corporate forecasts affected by the coronavirus pandemic.
Overnight losses on Wall Street and weak US futures weighed on stocks in Japan and Australia, despite stocks enjoying their best month in years.
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In Japan, the benchmark Nikkei erased Thursday’s gains by declining 2.8 percent although it also recorded its best month overall since October 2017 after climbing 6.7 percent in April.
Japanese stocks retreated from a nearly eight-week high led by declines in chipmaking firms and as investors rearranged their portfolios after a streak of earnings reports.
Australia’s S&P/ASX200 plunged by 5.01 percent.
Futures of the US S&P 500 Index fell 2.3 percent as at 09:19 GMT after companies including Amazon.com Inc and Apple Inc warned of the virus’s drag on earnings, while the United Kingdom’s FTSE 100 Index decreased 2.6 percent.
In commodities, oil prices rose, extending gains from the previous two sessions as major producers began output cuts to offset a slump in fuel demand triggered by the coronavirus pandemic.
Still, trading continued to be volatile after one of the most turbulent months in the history of oil trading in April, when United States futures briefly crashed into negative territory due to a supply glut.
Brent crude for July delivery, which started trading on Friday as the new front-month contract, was up 22 cents, or 0.8 percent, at $26.70 a barrel by 06:42 GMT. Brent rose 12 percent on Thursday and rose about 11 percent in April, but the international benchmark has sagged about 60 percent this year on the coronavirus impact.
US crude for June delivery rose 34 cents, or 1.8 percent, to $19.18 a barrel, having gained 25 percent in the previous session. But US oil fell for a fourth month in April and has tumbled 70 percent this year.
Also supporting prices was data from the US Energy Information Administration data showing crude inventories rose by 9 million barrels last week to 527.6 million barrels, less than the 10.6 million-barrel rise analysts had forecast in a Reuters poll.
“This is a second straight week of inventory and product demand figures suggesting a bottoming of the US market,” said Stephen Innes, chief market strategist at AxiCorp.