CANBERA (dpa-AFX) - Asian stock markets are in negative territory on Thursday amid rising concerns about the economic impact of the coronavirus pandemic after the U.S. Federal Reserve Chairman Jerome Powell warned of a prolonged recession.
Powell said that the coronavirus crisis raises longer-term concerns that could result in an extended period of low productivity growth and stagnant incomes. He added the Federal Reserve is not considering adopting negative interest rates.
The Australian market is declining following the sell-off on Wall Street after a downbeat assessment of the U.S. economy by Powell and as investors digested data that showed an increase in Australia's unemployment rate for April.
The benchmark S&P/ASX 200 Index is losing 52.80 points or 0.97 percent to 5,369.10, after touching a low of 5,342.90 earlier. The broader All Ordinaries Index is lower by 53.30 points or 0.97 percent to 5,460.40. Australian stocks closed modestly higher on Wednesday.
In the oil sector, Santos is lower by almost 2 percent while Woodside Petroleum and Oil Search are losing more than 1 percent each after crude oil prices declined overnight.
Among the big four banks, National Australia Bank, ANZ Banking and Westpac are lower in a range of 1.6 percent to almost 2 percent, while Commonwealth Bank of Australia losing almost 3 percent.
In the mining space, Rio Tinto and Fortescue Metals are declining almost 1 percent each, while BHP is down 0.6 percent.
Bucking the trend, gold miners are higher after gold prices rose overnight. Newcrest Mining is rising more than 2 percent and Evolution Mining is adding almost 1 percent.
Graincorp reported a turnaround to profit in the first half of the year following the sale of its Australian Bulk Liquid Terminals business and the de-merger of United Malt. The bulk grain handler's shares are gaining almost 6 percent.
In economic news, the Australian Bureau of Statistics said that the unemployment rate in Australia came in at a seasonally adjusted 6.2 percent in April. That was up from 5.2 percent in March, but was well beneath expectations for 8.3 percent.
The Australian economy lost 594,300 jobs last month, missing forecasts for a decline of 575,000 following the increase of 5,900 jobs in the previous month.
Australia will also see the inflation forecast for May from the Melbourne Institute today.
In the currency market, the Australian dollar is lower against the U.S. dollar on Thursday. The local unit was quoted at $0.6447, down from Wednesday's close of $0.6479.
The Japanese market is extending losses to a third straight day and the safe-haven yen strengthened following the negative cues overnight from Wall Street.
Investors are looking ahead to the Japanese government's expected decision later today to lift the state of emergency following the outbreak of the novel coronavirus in 39 of Japan's 47 prefectures.
The benchmark Nikkei 225 Index is down 86.54 points or 0.43 percent to 20,180.51, after falling to a low of 20,081.71 in early trades. Japanese shares fell further from a two-month high on Wednesday.
Market heavyweight SoftBank Group is declining almost 1 percent, while Fast Retailing is adding 0.4 percent.
The major exporters are lower on a stronger yen. Sony is losing almost 3 percent, while Panasonic and Mitsubishi Electric are declining almost 1 percent each. Canon is down 0.6 percent.
Sony reported a more than 36 percent fall in net profit for the full year through March 2020 and said it anticipates an at least 30 percent decrease in operating profit for the current year to March 2021.
In the tech space, Tokyo Electron is losing almost 2 percent and Advantest is lower by more than 1 percent. Among automakers, Honda is losing more than 2 percent and Toyota is declining more than 1 percent.
In the oil sector, Japan Petroleum is losing 3 percent and Inpex is declining almost 2 percent after crude oil prices fell almost 2 percent overnight.
Among the other major gainers, Takeda Pharmaceutical is rising more than 5 percent on an upbeat earnings outlook for the full year, while Daiichi Sankyo is higher by almost 5 percent and Oki Electric is advancing almost 4 percent.
On the flip side, Mitsui E&S and Shionogi & Co. are losing almost 4 percent each, while Ricoh Co., Yokohama Rubber and Ebara Corp. are lower by more than 3 percent each.
In the currency market, the U.S. dollar is trading in the upper 106 yen-range on Thursday.
Elsewhere in Asia, South Korea, Singapore and Hong Kong are losing more than 1 percent each, while Shanghai, New Zealand, Taiwan, Indonesia and Malaysia are also lower.
On Wall Street, stocks on Wednesday extended the sell-off from the previous session after Federal Reserve Chairman Jerome Powell warned the coronavirus crisis raises longer-term concerns that could result in an extended period of low productivity growth and stagnant incomes. The remarks from Powell mirror recent comments from other economists, who have predicted the economy will not experience the V-shaped recovery some investors seem to be expecting. Powell said the central bank may take additional steps to support the economy, but is not considering adopting negative interest rates.
The Dow plunged 516.81 points or 2.2 percent to 23,247.97, the Nasdaq slumped 139.38 points or 1.6 percent to 8,863.17 and the S&P 500 tumbled 50.12 points or 1.8 percent to 2,820.00.
The major European markets also showed significant moves to the downside on Wednesday. The U.K.'s FTSE 100 Index slumped by 1.5 percent, while the German DAX Index and the French CAC 40 Index plunged by 2.6 percent and 2.9 percent, respectively.
Crude oil prices drifted lower on Wednesday despite data showing a drop in U.S. stockpiles as well as a decline in output last week. Crude for June delivery declined $0.49 or about 1.9 percent to $25.29 a barrel.
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