SYDNEY (BLOOMBERG) – Global stocks started the week on the back foot as investors readied for the start of earnings season amid unprecedented uncertainty over the corporate impact of the coronavirus pandemic. Oil prices climbed in volatile trading after a historic deal to cut output.
US equity futures declined in early Asia trading, while shares retreated in Japan and South Korea. Many markets remained closed for the Easter holiday.
S&P 500 futures fell 1 per cent at 11.22am in Tokyo.
Japan’s Topix Index fell 1.3 per cent while South Korea’s Kospi Index slipped 1 per cent and the Shanghai Composite Index fell 0.3 per cent.
Singapore’s Straits Times Index was down 0.2 per cent at 10.38am local time.
With earnings season kicking off in earnest this week, investors will be hoping to get a better sense of how bad the hit to global profits could be as the coronavirus upends the world’s economies. Uncertainty is high as to what the coming months will bring with companies having a hard time grasping the situation and predicting the short-term future.
Meanwhile, without an effective therapy or a vaccine for the novel coronavirus, the US economy could face 18 months of rolling shutdowns as the outbreak recedes and flares up again, Federal Reserve Bank of Minneapolis President Neel Kashkari said.
The US dollar dipped after Opec+ agreed to cut 9.7 million barrels a day from global crude output – just below the initial plan of 10 million. The yen rose 0.1 per cent to 108.33 per dollar.
The euro was steady at $1.0935 after France, Germany, Italy and Spain reported a slowdown in new coronavirus cases.
Brent for June delivery rose 4.6 per cent to US$32.94 a barrel on the ICE Futures Europe exchange as of 10.09am in Singapore. It lost 7.7 per cent last week and has fallen from US$66 at the end of last year. The global benchmark’s June-December timespread moved slightly deeper into contango, indicating that traders see the physical glut worsening even with the output cuts.
West Texas Intermediate for May delivery added 5.4 per cent to US$23.98 a barrel on the New York Mercantile Exchange after dropping almost 20 per cent last week.