Stocks in Asia Pacific slipped in Thursday afternoon trade after the International Monetary Fund slashed its economic forecasts again on Wednesday.
South Korea’s Kospi led losses among the region’s major markets as it slipped 1.77%. In Japan, the Nikkei 225 slipped 0.99% while the Topix index shed 1%.
Shares in Australia also declined, with the S&P/ASX 200 falling 1.62%. Over in Southeast Asia, the Straits Times index fell 1.25%.
Overall, the MSCI Asia ex-Japan index slipped 0.7%.
Markets in China and Hong Kong are closed on Thursday for a holiday.
The IMF now estimates a contraction of 4.9% in global gross domestic product in 2020, lower than the 3% fall it predicted in April.
“The Covid-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast,” the IMF said Wednesday in its World Economic Outlook update.
“In the month of May — every single economy we track, over a hundred — was deemed to be in recession,” Mark Zandi, chief economist at Moody’s Analytics, said on Thursday.
“Typically in recessions globally you have one part of the world, major part of the world, that navigates the recession reasonably well, comes out the other side and is the engine of … growth in the economic recovery,” Zandi said. “There’s no obvious engine of growth here.”
Investor reaction to overnight moves on Wall Street was also watched on Thursday. The Dow fell 710.16 points, or 2.7%, to close at 25,445.94. The S&P 500 finished its trading day 2.6% lower at 3,050.33 while the Nasdaq Composite slid 2.2% to close at 9,909.17. It was the worst day for the Dow, S&P 500 and Nasdaq since June 11.
The moves stateside came following a surge in coronavirus cases in certain states, with Florida and California reporting a record number of new cases. More than 2.36 million coronavirus cases have been reported in the U.S. while at least 121,662 lives have been taken, according to data compiled by Johns Hopkins University.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.32 after rising from levels below 97 seen earlier.
The Japanese yen traded at 107.20 per dollar in a volatile trading week that has seen it at levels below 106.4 against the greenback. The Australian dollar changed hands at $0.6865 after slipping from levels above $0.69 seen yesterday.
Oil prices were lower in the afternoon of Asian trading hours on Thursday, with international benchmark Brent crude futures down 0.47% to $40.12 per barrel. U.S. crude futures shed 0.34% to $37.88 per barrel.
