The major Asia Pacific stock indexes finished lower on Wednesday after giving up earlier gains, while shares in China bucked the trend to finish the session higher. Some traders blamed a warning from the White House about the spread of the coronavirus for the weakness, while lingering uncertainty over the timing of new stimulus, worried others.
In the cash market on Wednesday, Japan’s Nikkei 225 Index settled at 22751.61, down 132.61 or -0.58%. Hong Kong’s Hang Seng Index is trading 25444.56, down 191.10 or -0.75% and South Korea’s KOSPI Index closed at 2228.66, down 0.17 or -0.01%.
China’s Shanghai Index settled at 3333.16, up 12.27 or +0.37% and Australia’s S&P/ASX 200 Index finished at 6075.10, down 81.20 or -1.32%.
Trump Warns US Coronavirus Outbreak Will Probably ‘Get Worse Before It Gets Better’
President Donald Trump warned Tuesday the coronavirus pandemic in the United States will probably “get worse before it gets better.”
“That’s something I don’t like saying about things, but that’s the way it is, it’s what we have,” he said during a White House briefing on the pandemic. “You look over the world, it’s all over the world.”
“We understand the disease to a large extent. Nobody’s going to maybe every fully understand it. But we’ll end up with a cure, we’ll end up with therapeutics, we’ll end up with a vaccine very soon.”
“A permanent shut down was really never an option in terms of what we’re doing right now,” he added.
Congress Returned This Week with Only Days to Pass New Coronavirus Relief as Pandemic Rages
Congress returned to Washington to kick off talks on the next coronavirus relief bill. Lawmakers face pressure to pass legislation before the end of the month, when the $600 per week federal unemployment insurance benefit is set to expire.
Republicans and Democrats have to resolve differences on several issues, including the jobless benefit, liability protections for businesses, aid to state and local governments and direct payments to Americans.
Japan’s Nikkei Falls on Weak Economic Data
Japan’s Nikkei 225 Index settled lower after the country reported the 13th consecutive month of contraction for Japan’s manufacturing activity. The preliminary data relating to the manufacturing PMI of Japan, drawn up jointly by Markit and Jibun Bank, indicates a rise to 42.6 points for the month of July, compared to the previous 40.1 points. But the data remains in the contraction phase, as it is below the threshold of 50 points, the dividing line between the contraction phase – values less than 50 points – and between the expansion phase – values above.
Australian Shares Fall Amid Rising Concerns of Second COVID-19 Wave
Australian shares dipped on Wednesday as fresh fears of a second COVID-19 wave were realized following a jump in the number of Victorian cases.
Wednesday’s market slump came despite a 2.4 percent rise in retail turnover that showed the Australian economy could be normalizing.
Westpac senior economist Matthew Hassan said the ongoing trading environment would be determined on Australia’s ability to clamp down on the Victorian cluster.
Resolute Mining had the largest share price surge of the day, with its stock rising 12.9 percent to $1.40 each. Healthcare company Mesoblast had the largest drop. Its share price fell 6.8 percent to $3.45 each.