Asia stocks fall after Trump warns of big coronavirus death toll

Asia stocks followed Wall Street lower under pressure from grim coronavirus figures in the US, where up to 240,000 people could die as a result of the pandemic, while signs of an economic recovery in China did little to cheer investors.

Meanwhile, the Hong Kong-listed shares of HSBC and Standard Chartered tumbled after the two banks bowed to pressure from financial regulators to halt dividends during the pandemic.

In early trading in the region, Japan’s benchmark Topix fell 0.5 per cent after data showed the country’s factory activity shrank in March.

Hong Kong’s Hang Seng index slipped 0.4 per cent. Shares in HSBC and Standard Chartered dropped by as much as 9.9 per cent and 7.4 per cent, respectively, after the two Asia-focused lenders said they would scrap investor payouts this year.

China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks edged 0.7 per cent higher after a private survey signalled modest growth in manufacturing activity in March, following a contraction owing to coronavirus the previous month.

Most economists had forecast the Caixin Manufacturing Purchasing Managers’ index to register a negative reading. Investors are closely watching Chinese data for signs of how the world’s second-biggest economy recovers from the outbreak.

Zhong Zhengsheng, chief economist at CEBM Group, said there was a “limited improvement” in Chinese business conditions in March. But many companies in the country are still laying off workers and losing export orders as the crisis spreads worldwide, he said.

Global equities have rallied over the past two weeks as investors pin their hopes on huge stimulus efforts by policymakers. But there are fears that the positive momentum may be slowing.

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 Futures markets pointed to a fall of 1.1 per cent for the S&P 500 when Wall Street opens later in the day. President Donald Trump, who had previously downplayed the pandemic, warned on Tuesday that up to a quarter of a million people in the US could die as a result of coronavirus even if Americans follow social distancing guidelines.

Futures also tipped the FTSE 100 index to drop 1.8 per cent when London opens later on Wednesday.

Haven assets climbed with gold up 0.5 per cent at $1,78.62 per ounce. The 10-year US Treasury yield fell 0.01 percentage point to 0.659 per cent. Yields fall as bond prices rise.

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