By Gina Lee
Investing.com – Asian stock markets were down on Thursday, continuing their retreat from Wednesday in the aftermath of grim remarks from U.S. Fed chair Jerome Powel that the economic damage from the COVID-19 virus is far from over.
Speaking at a webcast event for the Peterson Institute for International Economics on Wednesday, Powell said, “While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks.”
Powell also suggested the need for more fiscal support, but firmly said that negative rates were not being considered. Although Republicans rejected a $3 trillion stimulus package drafted by House Democrats, it could be resurrected as an eventual smaller compromise.
Meanwhile, another 2.5 million Americans are forecast to have claimed unemployment n the past week when initial jobless claims data is released tomorrow.
Japan’s Nikkei 225 was down 0.63% by 11:10 PM ET (4:10 AM GMT). Prime Minister Shinzo Abe will decide on whether to end the state of emergency in 39 of 47 prefectures earlier than the scheduled May 31 date later in the day. South Korea’s KOSPI lost 0.92%.
Down Under, the S&P/ASX 200 dropped 0.81% with the country’s statistics bureau reported a record 594,300 employment drop in April.
Hong Kong’s Hang Seng Index slid 1.01% even after Hong Kong-listed Tencent posted better-than-expected first quarter earnings on Wednesday.
China’s Shanghai Composite was down 0.46% and the Shenzhen Componentlost 0.60%. China will release industrial production and retail sales data for April on Friday.
Some investors also expressed worries that global equities’ rally from its March lows is stalling.
“Views are beginning to firm that the 2020 bear-market rally may have run its course,” Matthew Sherwood, head of investment strategy for multi-asset at Perpetual Investment Management, told Bloomberg.