Asian shares dove after failed COVID-19 drug and threats of economic damage

Today, April 24th saw the falling of Asian shares and U.S. stock futures. This resulted from doubts on narcotics that could potentially cure COVID-19 and an apparent damage in the U.S. economy due to the outbreak.

Among the shares in the Asian regions that fell are MSCI’s broadest index of Asia Pacific outside Japan with 0.4% and China by 0.25%.

Globally, MSCI’s gauge of stocks had fallen by 0.23%

Nikkei Stock in Japan slid down by 0.86%. The fall comes as the country is still gripped by worries of public infection prior to the Golden Week public holidays.

South Korean shares, despite the country being commended for proactively containing COVID-19, fell by 0.76%,

On the other side of the globe, the S&P 500 and Nasdaq rendered negative upon closing on Thursday. This came after news of the failure of Gilead Sciences Inc’s antiviral drug remdesivier in helping gravely-ill COVID-19 patients upon preliminary clinical trial.

Gilead however was quick to state that results are inconclusive as the study administered in China was ceased earlier than projected.

The matter stands that the market is highly sensitive to any news regading medical resolve for the coronavirus. It is reflective of investors’ grim and apprehensions as to when the global economy would go back into shape.

This month saw the business activity in the U.S. reaching record lows, characteristic of its Eoropean and Asian counterparts. This was owed to stringent stay-at-home measures implemented by world governments to flatten the curve. But of course, it came at a price as it dulled production, emptied supply chains, and rendered an abnormal consumer spending behavior as a survey had illustrated.

On Thursday, the American House of Representatives passed a US$484 billion bill that aims at expanding federal loans to small-scale businesses and hospitals that are assailed by COVID-19-related cases. Later within that day, President Donald Trump who had committed into signing the bill, said that it might be necessary to exted social distancing guidelines well into the first weeks of summer.

With everything looking gloomy for the global economy, Oil prices had extended rebound tentative to a price collapse, pushing U.S. Crude futures into a negative.

Despite this, inevestors are still wary of the waning energy demand and the excess in crude supplies. U.S. crude had ticked up 3.94% to US$17.15 a barrel. Brent crude went up by 3.09 per cent to US$21.99 per barrel in Asia, this came after a select number of oil producers disclosed that output cuts will be brought forward.

The USD went on for weekly gains against the Norwegian crown (NOK), the CAD, and the Russian Ruble (RUR) with the investors compelled to sell major oil producers currencies and store their funds in dollars.

The EUR is geared to its second weekly decline against the dollar after Thursday saw EU’s agreement to set up a joint financial fund that would total 2 trillion euros for the pandemic aid. However, the decision was shelved with reagrd to the programme details until summer.

Tim Ghriskey, Chief Investment Strategist at New York-based wealth management firm Inverness Counsel has this to say: “Any piece of bad news is likely to rattle the market…Investors are keen for a semblance of hope that they can soon crawl out of their homes and get on with some form of normal life, even if with trepidation and fear.”