Asian Stocks Tumble After Wall Street Rises on Pricier Oil

Asian stock markets tumbled Friday after soaring U.S. job losses tempered enthusiasm about a possible deal to stabilize oil prices amid anxiety over the global economic decline due to the coronavirus pandemic.

Benchmarks in Shanghai, Tokyo and Hong Kong all retreated. Australia’s main index fell 2.3%.

Some markets followed Wall Street higher in early trading after President Donald Trump said on Twitter that he expected major oil producers Saudi Arabia and Russia to back away from their price-cutting war. But by midday, all major Asian markets had retreated. Southeast Asian benchmarks were mixed.

U.S. unemployment numbers were a “hard dose of economic reality” for markets, Jeffrey Halley of Oanda said in a report.

Government data showed 6.6 million initial U.S. jobless claims this week, double the previous week’s record-breaking figure. That raised the number of Americans who have lost jobs in the coronavirus-driven downturn to almost 10 million.

The Shanghai Composite Index lost 0.7% to 2,762.04 and Tokyo’s Nikkei 225 fell 0.6% to 17,712.51. The Hang Seng in Hong Kong lost 0.8% to 23,098.68.

The Kospi in Seoul retreated 0.6% to 1,713.55 while Sydney’s S&P-ASX 200 declined to 5,032.80. India’s Sensex opened down 1.7% at 27,784.21.

New Zealand and Jakarta gained while Singapore and Bangkok retreated.

Markets usually welcome lower energy costs for companies and consumers. But the abrupt plunge to below $20 this week from $60 at the start of the year triggered fears heavily indebted producers might default, undermining credit markets.

Trump said on Twitter he expects production cuts are coming after talking with Saudi Crown Prince Mohammed bin Salman. The Kremlin denied President Vladimir Putin had talked with bin Salman but Saudi Arabia called for a meeting of major producers including Russia.

By the end of trading Thursday, benchmark U.S. crude rose $5.01, or 24.7%, to $25.32 per barrel.

Energy stocks in the S&P 500 rallied by 9.1% on Thursday. Schlumberger, an oilfield services company, jumped 10.2%, EOG Resources rose 10.7% and Occidental Petroleum leaped 18.9%, though for the year all three are down 50% to 70%.

The S&P 500 rose 2.3% to 2,526.90. It dropped as much as 0.6% earlier Thursday after the U.S. government reported more than 6.6 million Americans applied for unemployment benefits last week.

The Dow Jones Industrial Average gained 2.2% and the Nasdaq rose 1.7% to 7,487.31.

On Friday, U.S. crude declined $1.48 to $23.84 in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, shed $1.41 to $28.53 per barrel in London.

Roughly one of every 16 working Americans has applied for unemployment benefits in the last two weeks. Economists expect that to rise. That has many investors bracing for what may be the worst recession of their lifetimes.

The dollar edged up to 107.92 yen from Thursday’s 107.90 yen. The euro declined to $1.0845 from $1.0856.