Wuhan reopens, New York death toll surges

CMC Markets

A massive reverse down in US equities overnight paints a hazy picture for Asia on Wednesday. The death toll in New York hit a new high following a temporary decrease, suggesting that more time and patience is needed before light appears at the end of the tunnel.

For the city of Wuhan, it took 77 days of complete lockdown before Covid-19 was largely contained and for business activities to resume. It suggests that there is no easy way to get around the pandemic but only time and distance controls will gradually cure it. 

The S&P 500 erased as much as 3.5% early gains and closed marginally lower on the day. Sector wise, materials (+2.42%), energy (+2.0%) and consumer discretionary (+1.23%) were among the outperformers. Utilities (-1.21%), consumer staples (-1.20%) and information technology (-1.06%) were underperforming.

Technically, the S&P 500 has attempted to breakout above a key 38.2% Fibonacci Retracement level of 2,650 points but failed at its first attempt. Similarly, for Dow Jones, a strong resistance remains at around 22,550 points (38.2% retracement).

Currency markets today also exhibited a clear ‘risk off’ pattern, with Aussie and Kiwi falling the most among G10 peers. Safe-havens, JPY, USD and CHF were gaining the most.

Today is a noteworthy day as the city of Wuhan, the origin and once an epicentre of the Covid-19 outbreak, has resumed traffic and business operations officially on the 8th of April. On the same day, Singapore is officially entering into a ‘Circuit Breaker’ for one month, in which non-essential businesses are shut and all are asked to work from home.

Singapore’s Straits Times Index surged 4% yesterday, making it one of its best performing trading sessions this year. REITs and property developers were among the best performing groups this week, rising more than 10% over two days. Some profit-taking activities might kick in today following a lacklustre trading session in the US.

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