Asia’s stock markets fell and gold hit a one-week high on Thursday as worries about a second wave of coronavirus infections and a dour assessment of the way back from the head of the US Federal Reserve dashed hopes for a quick recovery.
Fed chair Jerome Powell warned of an “extended period” of weak economic growth, while vowing to use the US central bank’s power as needed and calling for additional fiscal spending to stem the fallout from the pandemic.
“The path ahead is both highly uncertain and subject to significant downside risks,” Powell said in a webcast speech. “The issue is whether we get a second wave (of infections) … that would be my greatest fear” he added.
Adding to investors’ angst, a top World Health Organisation official said the virus may never go away.
US stock futures fell 0.2 per cent, after the S&P 500 index’s worst two-day drop in nearly a month. Benchmark indexes in Australia, Hong Kong, Korea and China all fell about 1 per cent.
Bonds and the dollar rallied after Powell talked down the prospect of negative interest rates in the United States, and extended gains on Thursday. Yields on benchmark US 10-year Treasuries fell slightly to 0.6412 per cent.
South Korea is dealing with a fresh outbreak in Seoul, while China has re-imposed movement restrictions near its borders with North Korea and Russia after a new outbreak was detected there. ♦
