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Coronavirus: Stocks slump as Japan reports economic contraction

The Nikkei 225 in Tokyo fell 0.8% to 23,096.75 after data showed the world's third-largest economy shrank 27.8% from a year earlier in the three months ending in June

twitter-logoAssociated Press | August 17, 2020 | Updated 16:44 IST
Coronavirus: Stocks slump as Japan reports economic contraction
The Nikkei 225 in Tokyo fell 0.8% to 23,096.75

Japanese stocks sank while other global markets and US futures gained on Monday after Japan reported a record economic contraction amid the coronavirus pandemic.

The Nikkei 225 in Tokyo fell 0.8% to 23,096.75 after data showed the world's third-largest economy shrank 27.8% from a year earlier in the three months ending in June. That was bigger than the deepest decline during 2008-09 financial crisis.

The road ahead looks choppy as a resurgence in Covid cases will weigh on domestic and overseas spending, said Stefan Angrick of Oxford Economics in a report.

In early trading, the FTSE 100 in London gained 0.1% to 6,097.97. The DAX in Frankfurt was up 0.1% at 12,913.62 and France's CAC 40 added less than 0.1% to 4,964.88.

On Wall Street, futures for the benchmark S&P 500 Index and for the Dow Jones Industrial Average were up 0.3%.

The S&P 500 ended last week little changed. The index declined less than 0.1% while the Dow gained 0.1%. The The Nasdaq composite dipped 0.2%.

In Asia, the Shanghai Composite Index rose 2.3% to 3,436.80 and Hong Kong's Hang Seng gained 0.7% to 25,347.34. South Korean markets were closed for a holiday.

The S&P-ASX 200 in Sydney shed 0.8% to 6,076.40 while India's Sensex advanced 0.3% to 37,994.08. New Zealand advanced while Singapore and Bangkok declined.

Bangkok's main index lost 0.5% after Thailand reported its economy shrank 12.2% from a year earlier in the quarter ending in June. That was its worst performance since 1998 during the Asian financial crisis.

Investors in Asia were looking ahead to central bank meetings this week in China, Indonesia and the Philippines, with few other market-moving events in sight.

In the United States, economists say consumer spending could be under more pressure after government aid including additional 600 weekly unemployment benefits expired. Investors are counting on Washington for another economic lifeline, but legislators are far apart on a possible package.

In energy markets, benchmark US crude gained 20 cents to 42.21 per barrel in electronic trading on the New York Mercantile Exchange.

The contract slipped 23 cents on Friday to settle at 42.01. Brent crude, the standard for international oil prices, added 17 cents to 44.97 per barrel in London. It 16 cents the previous session to 44.80.

The dollar declined to 106.47 yen from Friday's 106.59 yen. The euro gained to 1.1835 from 1.1843.

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