SINGAPORE (ICIS)–Asian stock markets plumbed
to new depths on Friday, with shares of
chemical firms all in the red following another
slump in US equities overnight on deepening
worries over the economic toll of the
coronavirus pandemic.

Global equities markets are heading for their
worst week since the 2008 financial crisis as
panicked investors shrugged off recent fiscal
and monetary stimulus packages meant to shore
up the economy.

At 04:00 GMT, Japan’s benchmark Nikkei 225
Index was down 8.97%, after slumping by as much
as 10% in early trade, with not one stock on
the index in positive territory.

Japanese producers Asahi Kasei, Mitsui
Chemicals, JXTG Holdings were all down by more
than 8%.

In South Korea, trading was halted after the
key KOSPI Index fell by more than 7%. Hanwha
Corp was down by close to 12% during the
morning session.

In Thailand, trading was also temporarily
stopped as the Stock Exchange of Thailand (SET)
composite index fell 10%, with shares of
PTT Global Chemical falling nearly 16% at
market open.

Hong Kong’s Hang Seng Index was down by around

Stock Exchange
/Company (as of 4:00 GMT)
% Change
Nikkei 225 (Japan) -8.97%
Asahi Kasei Corporation -8.30%
JXTG Holdings, Inc. -8.34%
Mitsubishi Chemical Holdings Corporation -8.04%
Mitsui Chemicals, Inc. -8.80%
Hang Seng Index (Hong
Sinopec Shanghai Petrochemical Company -5.66%
PetroChina Company -5.86%
KOSPI Composite Index (South
OCI Company Ltd -12.73%
SK Innovation Co., Ltd. -8.77%
LG Chem, Ltd. -6.73%
Lotte Chemical Corporation -9.71%
Hanwha Corporation -11.91%
TSEC weighted index
Formosa Petrochemical Corporation -8.95%
Nan Ya Plastics Corporation -8.31%
Formosa Chemicals & Fibre Corporation -7.32%
SET Index (Thailand) -10.71%
PTT Global Chemical Public Company -12.69%
IRPC Public Company -6.37%
Indorama Ventures Public Company -14.43%
Thai Oil Public Company -9.92%
STI Index (Singapore) -4.82%
Wilmar International -4.39%
Olam International -6.33%
FTSE Bursa Malaysia KLCI
SSE Composite Index (Shanghai,

“Financial markets expressed their
dissatisfaction with [US President Donald]
Trump’s lack of details on fiscal stimulus and
the lack of a clear strategy to cope with the
health crisis that the coronavirus presents,
even as the Fed [Federal Reserve] will provide
$1.5 trillion in overnight operations and
pledged to inject $5 trillion over the next
month to combat temporary disruptions in
funding markets,” OCBC Bank said in a note.

Overnight, the Dow Jones Industrial Average
shed 9.99%, its worst drop since the 1987
“Black Monday” market crash, when it collapsed
by more than 22%.

The S&P 500 plunged 9.51%, joining the Dow
in a bear market, and also seeing its worst day
since 1987. The Nasdaq Composite closed 9.43%

Major European markets all plunged by more than
10% on Thursday, posting their worst one-day
drop in history, after Trump imposed a ban on
all travel from 26 European countries for 30
days to curb the spread of the novel
coronavirus. The new rules will go into effect
later on Friday.

Contrary to market expectations, the European
Central Bank (ECB) decided on Thursday not to
cut interest rates. However, the ECB did
announce measures to support bank lending and
expanded its asset purchase program.

ECB President Christine Lagarde on Thursday
said that the spread of the coronavirus has
been a “major shock to the growth prospects of
the global economy and the euro areas economy
and it has heightened market volatility”.

As of 23:44 GMT on Thursday, the total
confirmed cases of the coronavirus globally
stood at more than 128,000, with 4,7230 deaths.

The novel coronavirus, which emerged late last
year in Wuhan in China’s central Hubei
province, has now spread to 114 countries and

In China, the peak of outbreak in the country
has passed after it reported eight new
infections in Hubei province, according to its
National Health Commission on Thursday. This
was the first time the epicenter of the
coronavirus outbreak has reported a daily total
increase of confirmed cases at less than 10.

The Chinese Ministry of Commerce on Thursday
said it will further expedite the export tax
rebate to ease the burden on exporters in a
move to stabilize foreign trade.

“In the short run, the impact [of the
coronavirus] on global economy and supply
chains is inevitable, and the international
economic and trade growth will be pressured,
which will affect the business resumption of
China’s foreign trade firms and their ability
to secure new orders,” Li Xingqian, director of
foreign trade department under the commerce
ministry, was quoted as saying by state news
agency Xinhua.

The extended Lunar New Year holidays because of
the coronavirus outbreak have disrupted China’s
business operations, supply chains and economic
activities, leading to a slump in demand, with
the country’s imports and exports down by 11%
year on year in first two months of 2020.

Manufacturing export centers such as Germany,
South Korea, Canada and Vietnam are most at
risk from the coronavirus outbreak, ICIS
analyst Ann Sun said.

The “anti-globalisation trend” which has
emerged in the last few past years could be
disrupted by the pandemic, as global
collaboration will be critical, she said.

“The recovery of supply chains and demand in a
global basis will be the major topic for
petrochemical industry in H2 2020,” she added.

(adds details throughout)

Focus article by Nurluqman

Photo: The Dow Jones industrial average
dropped enough to trigger a 15-minute pause in
trading on the floor of the New York Stock
Exchange in New York. 12 March 2020 (Photo by

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