Stocks in Asia were little changed in Wednesday morning trade as the International Monetary Fund said the global economy is set to see a more significant contraction than it previously forecast.
In Japan, the Nikkei 225 shed 0.77% in early trade while the Topix index declined 0.4%. Japan’s exports plunged 28.3% year-on-year in May, according to provisional trade statistics released Wednesday by the country’s Ministry of Finance.
Over in South Korea, the Kospi hovered around the flatline.
Meanwhile, the S&P/ASX 200 in Australia added 0.3%
Overall, the MSCI Asia ex-Japan index traded 0.07% higher.
IMF Chief Economist Gita Gopinath said in a Tuesday blog post that “the forthcoming June World Economic Outlook Update is expected to show negative growth rates even worse than previously estimated.” The fund also said the current crisis, which it dubbed the Great Lockdown, is “unlike anything the world has seen before.”
Authorities have imposed lockdown measures to curb the spread of the coronavirus pandemic, leaving most economies essentially frozen. While many countries have begun to ease these measures, it has proven challenging given the looming threat of a potential resurgence in Covid-19 cases.
Meanwhile, trial results announced Tuesday showed dexamethasone — a widely available drug — can help critically ill coronavirus patients. The treatment reportedly reduced Covid-19 deaths in hospitalized patients by up to one third. Globally, more than 8 million people have been infected by the virus while at least 438,171 lives have been taken, according to data compiled by Johns Hopkins University.
Investors will likely also continue to watch for developments on the geopolitical front regionally, as tensions escalate along the Korean peninsula after North Korea reportedly destroyed a liaison office with the South. Over at the Himalayan border, Indian and Chinese troops clashed as the two sides remain in a standoff, according to a Reuters report.
Overnight on Wall Street, the Dow Jones Industrial Average closed 526.82 points higher at 26,289.98. The S&P 500 gained 1.9% to end its trading day at 3,124.74 while the Nasdaq Composite closed 1.8% higher at 9,895.87. It was the third straight gain for the major averages.
Oil prices fall
The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97 after touching levels around 96.5 earlier.
The Japanese yen traded at 107.38 per dollar after seeing levels around 107 earlier in the trading week. The Australian dollar changed hands at $0.6893 after slipping from levels above $0.693 yesterday.
— CNBC’s Silvia Amaro and Fred Imbert contributed to this report.