The Asian and Pacific Rim markets were seeing red on Thursday. Overnight the Dow Jones Industrial Average (DJIA) shed over 1,400 points to officially enter bear market territory.
Traders around the Asian region are worried about vague fiscal policy out if the United States and U.S. President Donald Trump addressed the nation. The World Health Organization (WHO) has officially declared the Covid-19, coronavirus, a global pandemic. This did not help market sentiment.
In Japan, the benchmark Nikkei 225 index tumbled over five percent. The broader Topix index in Tokyo lost 4.78 percent. The safe haven Japanese yen, in the USD/JPY Forex market, gained ground as was last trading at 103.37 yen.
The Asian benchmark in South Korea shed 3.8 percent and the Australian S&P ASX 200 shed six percent.
In Hong Kong, the Hang Seng index fell over 3.3 percent.
The Chinese benchmarks were all lower by the afternoon. The Shanghai composite fell 1.4 percent and the Shenzhen composite lost over 1.7 percent. The Shenzhen component was down 1.8 percent by lunchtime.
Asian Traders are not impressed with U.S. Fiscal Vagueness
Overnight, U.S. President Donald Trump gave a televised addressed about the spread of the coronavirus (COVID-19). He announced a travel ban to and from the European Union which will last for thirty (30) days.
He said that this ban is a bid to contain the spread of what he termed a “foreign” virus from countries with “open border” policies.
The rest of the president’s speech was mostly vague rhetoric. Trump said that he will instruct the Small Business Administration to “provide capital and liquidity” to small businesses. He also said that he would ask Congress for tax relief.
The ECB Monetary Policy Announcement is due Later Today
The European Central Bank (ECB) will announce their monetary policy and rate decision. Traders will closely read their monetary policy statement.
They will be looking for any clues about the future of rates and quantitative easing (QE). The Eurozone continues to struggle to see economic and price growth.
The European Central Bank is expected to further insulate the Eurozone economy from the economic damage being caused by the COVID-19 virus.