Yahoo Finance Asian Shares Rise after Wall Street Gains on US Stimulus, Oil Rebound
The major Asia-Pacific stock indexes finished mixed but mostly higher on Thursday with a rebound in crude oil prices helping to underpin equity prices. The economic news was light in the region, but South Korea’s economy saw its largest contraction since 2008 in the first quarter, Reuters reported on Thursday.
In the cash market on Thursday, Japan’s Nikkei 225 Index settled at 19429.44, up 291.49 or +1.52%. Hong Kong’s Hang Seng Index finished at 23977.32, up 83.96 or +0.35% and South Korea’s KOSPI Index closed at 1914.73, up 18.58 or +0.98%.
China’s Shanghai Index settled at 2838.50, down 5.48 or -0.19% and Australia’s S&P/ASX 200 Index finished at 5217.10, down 4.10 or -0.08%.
South Korea Posts Biggest GDP Fall Since 2008 as Pandemic Cripples Demand
The coronavirus pandemic pushed South Korea’s economy into its biggest contraction since 2008 in the first quarter, as self-isolation measures hit consumption and global trade slumped.
Gross domestic product (GDP) decreased by a seasonally adjusted 1.4% in the first quarter from three months earlier, preliminary central bank data showed on Thursday, a slightly smaller decline than the 1.5% contraction seen in a Reuters poll and reversing 1.3% growth in the fourth quarter.
Highlighting the challenges in domestic demand, private consumption shrank 6.4% on-quarter to mark the worst reading since a 13.8% contraction in the first quarter of 1998, during the Asia Financial Crisis.
From a year earlier, the economy grew 1.3% in the first quarter, slowing from 2.3% growth in the fourth quarter and compared with 0.6% seen in the poll.
South Korea Finance Minister: Brace for Bigger Shock
South Korea’s finance minister Hong Nam-ki said in a policy meeting Asia’s fourth-largest economy should brace for a bigger shock from the second quarter as demand from major trading partners plummets. Data showed that the pandemic’s hit to global trade has left the export-reliant economy under extreme pressure.
Investors worry a slump in the Chinese economy could severely dent global growth and demand for key South Korean exports items including memory chips and petrochemical products.
China last week posted its first GDP contraction since quarterly records began in 1992 as the coronavirus shut down its factory and retail sectors.
The pressure on South Korea’s economy is expected to persist over coming months, with economists in a Reuters poll expecting GDP to shrink 0.1% this year. The International Monetary Fund (IMF) sees an even bigger 1.2% contraction.
Australian Shares Pressured by Grim Business Activity Survey
Australian shares closed slightly lower on Thursday as a survey showing grim business activity data overshadowed a surge in exports, while losses in healthcare and financial stocks eclipsed gains in miners.
Aussie shares were higher early in the session on hopes that the U.S. House of Representatives would pass a fresh $484 billion relief package to aid small businesses amid the coronavirus pandemic.
Australian stocks pared gains after a survey showed the country’s overall activity index plunged to a record low of 22.4 in April, compared with 40.7 in March, implying a contraction.
Flash Manufacturing PMI came in at 45.6. The previous month was revised lower to 49.7. Flash Services PMI was 19.6. The previous month was lowered to 38.5.
With virus-driven lockdowns and social distancing still in place, the woeful services sector performance is expected to get worse.
This article was originally posted on FX Empire
