Mumbai (Commodities Control) -- Chinese shares slid and the yuan weakened Monday as traders returned from an extended holiday amid the worsening coronavirus outbreak. Support measures from China’s government helped stem losses somewhat in Asia, while U.S. futures rose and Treasuries slipped.
Stocks in Shanghai opened 9% lower, while local iron ore and copper futures fell by the daily limit. Equities came off their lows in Tokyo, Seoul and Sydney and fluctuated in Hong Kong. Oil and gold saw modest declines, while the yuan fell past the key 7-per-dollar level. The deadly outbreak showed no signs of slowing with China’s death toll reaching at least 360.
In coomodities, WTI crude lost 0.6% to $51.25 a barrel and gold fell 0.4% to $1,583 an ounce. However U.S. soybean edged up on Monday after hitting a two-month low earlier in the session as fears that an outbreak of coronavirus will reduce demand from top consumer China.
The most active soybean futures on the Chicago Board Of Trade were up 0.2% at $8.74-1/2 a bushel, as of 0207 GMT. Earlier in the session, they hit a low of $8.70-3/4 a bushel, their weakest since Dec 3. Soybeans closed 0.4% lower on Friday. Meanwhile, ICE cotton March contract is trading at 66.79 cents/lb, down 1.05% after opening at 67.30 cents/lb on Monday; close to Friday’s closing level.
Monday’s moves come on the back of turmoil last week that sent global equities to the worst week since August, amid concern growth will falter as the virus spreads.
The People’s Bank of China pledged 150 billion yuan ($21.7 billion) in liquidity in a slew of measures to shore up their financial markets.
Apart from this some key events to focus for the week includes, the first contest to choose a Democratic nominee to run against Donald Trump in November is the Iowa caucuses on Monday. The U.S. manufacturing gauge from the Institute for Supply Management is also due Monday.
There are also a slew of other PMIs, including India and Brazil. Tuesday brings a policy decision from the Reserve Bank of Australia. Friday has the U.S. employment report for January.
Meanwhile in the equities market so far, the MSCI Asia Pacific Index fell 1% as of 12:05 p.m. in Tokyo. Japan’s Topix index lost 0.7%. Shanghai Composite Index fell 8.2%. Hong Kong’s Hang Seng fell 0.3%. South Korea’s Kospi index retreated 0.5%. Australia’s S&P/ASX 200 Index dropped 1.3%. Future on the S&P 500 added 0.5%. The index declined 1.8% on Friday.
Among the major currencies, the yen fell 0.1% to 108.49 per dollar. The offshore yuan fell 0.2% to 7.0093 per dollar. The euro bought $1.1083, down 0.1%. The pound lost 0.3% to $1.3171. Bonds The yield on 10-year Treasuries ticked up one basis point to 1.52%. Australia’s 10-year yield dropped four basis points to 0.91%.
(Commodities Control Bureau)
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