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REFILE-GLOBAL MARKETS-Asia equities set to plunge after U.S. crude collapses for second day

Published 22/04/2020, 09:58 am
© Reuters.
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(Corrects typographical error in paragraph 5)

* Wall St stock indexes tumble; dollar rises

* All 11 S&P 500 sectors drop

* Gold falls as investors need cash to cover losses

* U.S. Treasury yields fall as investors seek shelter

By Katanga Johnson and Herbert Lash

WASHINGTON/NEW YORK, April 21 (Reuters) - Asian share markets were set to tumble on Wednesday as the floor fell out from under U.S. crude prices, exposing the deep damage the coronavirus pandemic has had on global economic demand.

Skittish investors sought the safety of government debt and even dumped safe-haven gold as Brent oil futures plunged for a second day, fueled by a swelling global crude glut.

Australian S&P/ASX 200 futures YAPcm1 lost 2.1% in early trading while Japan's Nikkei futures NKc1 rose 0.21%.

The collapse in U.S. crude prices has given fresh urgency to bearish voices who say it sounds alarm bells for global growth and are bracing for a catastrophic collapse in asset prices as the COVID-19 pandemic wrecks the world economy. this week, the May U.S. WTI futures contract CLc1 crashed into negative pricing for the first time in history. In addition to massive oversupply concerns, analysts say the plunge also highlights the technical constraints the market faces in responding to shocks.

"The negative price for May WTI futures was probably an anomaly, but it also was a symptom of bigger underlying issues that the industry must address," said Arij van Berkel, who leads the energy research team at Lux Research in Amsterdam.

"Even though the oil industry theoretically has a diversified product portfolio, the current situation shows that its ability to switch between markets is extremely limited."

The Nikkei 225 index .N225 closed down 1.15% at 19,669.12​​​ on Tuesday. The futures contract is down 2.64% from that close.

Hong Kong's Hang Seng index futures .HSI .HSIc1 lost 1.31%.

On Wall Street, the Dow Jones Industrial Average .DJI fell 2.67% to 23,018.88, the S&P 500 .SPX lost 3.07% to 2,736.56 and the Nasdaq Composite .IXIC dropped 3.48% to 8,263.23.

The pan-European STOXX 600 index .STOXX lost 3.39% and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 3.01%.

As the difficulties of restarting the U.S. economy sank in, U.S. Treasury yields tumbled, with the five-year note hitting a new record low on rising prices for bonds: one of the safest assets. U.S. dollar rose to a two-week high against a basket of currencies, as investors fled riskier assets for the world's most liquid currency while putting pressure on oil-linked currencies such as the Norwegian crown NOK= and the Canadian dollar CAD . face a worldwide supply glut that is expected to overwhelm demand for months or even years and current production cuts to offset that excess are nowhere near sufficient.

U.S. crude CLc1 recently rose 124.08% to $10.01 per barrel while Brent oil futures prices LCoc1 plunged again on Tuesday to $19.82, down 22.49% on the day, as panic extended to a second day.

Both Saudi Arabia and Russia said on Tuesday they were ready to take extra measures to stabilize oil markets along with other producers, but they have not taken action yet. have become increasingly wary of the economic damage from sweeping lockdowns that have brought U.S. business activity to a halt and sparked millions of layoffs. of about half a dozen U.S. states, including Georgia and South Carolina, are pushing ahead with plans to begin a partial restart of their economies despite warnings that loosening restrictions prematurely could lead to a fresh surge of infections.

Meanwhile, the U.S. Senate on Tuesday unanimously approved $484 billion in additional coronavirus relief for the U.S. economy and hospitals treating patients sickened by the pandemic, sending the measure to the House of Representatives for final passage later this week. Global assets

http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar

http://tmsnrt.rs/2egbfVh Global bonds dashboard (DO NOT USE UNTIL UPDATE FOUND)

http://tmsnrt.rs/2fPTds0 Emerging markets

http://tmsnrt.rs/2ihRugV MSCI All Country Wolrd Index Market Cap

http://tmsnrt.rs/2EmTD6j The plummeting price of oil interactive

https://reut.rs/39ieums

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