Stocks in Asia Pacific tumbled on Monday as the U.S. Federal Reserve slashed its benchmark interest rate to zero and launched a massive quantitative easing program in an emergency move on Sunday.
The Nikkei 225 fell 429.01 points, or 2.5%, Monday to 17,002.04.
Following the Fed’s announcement, the Bank of Japan announced on Monday steps such as the “active” purchase of exchange-traded funds and Japan real estate investment trusts to “contribute to supporting economic and financial activities.”
The Japanese yen, often viewed as a safe-haven currency in times of economic uncertainty, traded at 106.31 per dollar from lows around 108 seen late last week.
In Hong Kong, the Hang Seng Index dropped 969.34 points, or 4%, to 23,063.57.
Investors watched for market reaction to the Fed’s latest actions. The new fed funds rate, used as a benchmark both for short-term lending for financial institutions and as a peg to many consumer rates, will now be targeted at 0%-0.25% down from a target range of 1% to 1.25%.
Following the Fed decision, U.S. stock futures fell sharply. Stock market futures hit "limit down" levels of 5% lower, a move made by the CME futures exchange to reduce panic in markets. No prices can trade below that threshold, only at higher prices than that down 5% limit.
Australian markets tumbled Monday, in what experts are calling its largest ever daily drop.
The heavily weighted financial sub-index dived 11.1% as shares of the Australia’s major banks saw steep declines: Australia and New Zealand Banking Group plunged 12.5%, Commonwealth Bank of Australia slipped 10.%, Westpac fell 11.8% and National Australia Bank plummeted 12.4%.
The Australian dollar changed hands at $0.6143 after slipping from levels above $0.64 last week.
CHINA
The CSI 300 faltered 167.47 points, or 4.3%, to 3,727.84.
On the economic data front, China said Monday the national urban survey unemployment rate hit 6.2% in February. That’s the highest on record based on data accessed through Wind Information. The unemployment rate was 5.7% in February for 31 major Chinese cities, the National Bureau of Statistics said Monday.
Fixed asset investment plunged 24.5% in the first two months of the year from a year ago, the bureau said. Investment in manufacturing was the hardest hit, down 31.5%. Investment in high-tech was down 17.9%, the bureau said.
The Chinese government has taken measures to curb the coronavirus’ spread in the country, including the extension of the Lunar New Year holiday that left factories shuttered for a prolonged period.
In other markets
In Korea, the Kospi index backpedaled 56.58 points, or 3.2%, to 1,714.86
In Taiwan, the Taiex dumped 411.10 points, or 4.1%, to 9,717.77
In Singapore, the Straits Times Index dished off 138.23 points, or 5.3%, to 2,495.77
In New Zealand, the NZX 50 dipped 349.93 points, or 3.6%, to 9,476.94
In Australia, the ASX 200 lost 537.29 points, or 9.7%, to 5,002.
