Asian Stocks Mixed After Wall St. Hit by Oil Market Turmoil

Oil tank train cars sit idle Tuesday in East Chicago, Ind. (AP Photo/Charles Rex Arbogast)

Asian stock markets were mixed Wednesday as oil prices edged lower amid anxiety about the coronavirus pandemic’s mounting economic damage.

Benchmarks in Tokyo, Hong Kong and Southeast Asia retreated while Shanghai was little-changed after Wall Street suffered its biggest decline in weeks.

Oil prices slipped further after hitting an all-time low this week. The fall has rattled investors because it adds to evidence of the depth of a global economic downturn with factories idled and consumers ordered to stay home.

The plunge in oil prices “has stirred wider concerns of a sharp economic slowdown,” Hayaki Narita of Mizuho Bank said in a report.

Global oil demand is set to drop to levels last seen in the mid-1990s. Producers can’t slow their production fast enough. Storage tanks are running out of room.

Tokyo’s Nikkei 225 fell 0.7% to 19,137.95 and Hong Kong’s Hang Seng edged 10 points lower to 23,805.56. The Shanghai Composite Index advanced 0.5% to 2,840.05.

The Kospi in Seoul gained 0.5% to 1,888.50 and Sydney’s S&P-ASX 200 picked up 0.5% to 5,429.10.

India’s Sensex opened up 1.3% at 31,034.91. New Zealand’s main index fell 1.4% and Singapore was down 1.3%.

The price of a barrel of the benchmark grade of U.S. oil to be delivered in June lost 87 cents to $10.70 in electronic trading on the New York Mercantile Exchange. It plunged 43% the previous session to $11.57.

On Monday, the price of a U.S. barrel to be delivered next month fell to below zero. That meant traders were paying others to take it off their hands so they wouldn’t need to find places to store the swelling surplus.

The price for oil to be delivered in June didn’t hit zero, partly because storage isn’t as pressing a problem.

Brent crude, the price standard for international oils, lost another $2.97 cents to $16.34 per barrel in London. On Tuesday, it fell 24.4% to $19.33.

“Global markets are struggling mightily with a temporary but overwhelming demand drop,” said Stephen Innes of AxiCorp in a report. He said the June contract also could “fall prey to storage infrastructure saturation.”

On Wall Street, the benchmark S&P 500 fell 3.1% to 2,736.56.

Some 94% of stocks in the index declined. That included winners in the new stuck-at-home economy. Netflix slipped 0.8% before it announced its quarterly results that included a 23% rise in global memberships.

The Dow Jones Industrial Average fell 2.7% to 23,018.88. The Nasdaq was off 3.5% to 8,263.23.

Treasury yields fell further, indicating investors were shifting more money into bonds as a safe haven. The yield, or the difference between the market price and what a buyer will receive if the bond is held to maturity, on the 10-year Treasury dropped to 0.55% from 0.62% late Monday.

Also Tuesday, the U.S. Senate approved a virus aid bill worth nearly $500 billion. It would provide more loans to small businesses and aid to hospitals.

Georgia’s governor, meanwhile, announced plans late Monday to allow gyms, hair salons and other businesses to reopen as early as Friday.

Still, economic data are bleak. A report Tuesday showed the steepest drop for U.S. sales of previously occupied homes since 2015.

Pessimists say the market’s rally has been overdone and that a premature reopening of the economy could lead to only more flare-ups of infections.

The dollar declined to 107.59 yen from Tuesday’s 107.68 yen. The euro was unchanged at $1.0853.

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