HONG KONG: Asian equities sank again Thursday while the dollar surged as a European Central Bank plan to spend more than US$800 billion to buy bonds failed to instil optimism in traders who fear that the world is heading for a virus-fuelled economic catastrophe.
After announcing the move, ECB boss Christine Lagarde tweeted that “extraordinary times require extraordinary action. There are no limits to our commitment to the euro.” Seoul tanked more than 8%, Singapore dived 4.5% and Hong Kong, Sydney, Wellington and Bangkok lost more than 3%. Tokyo ended down 1%, while Taipei and Jakarta crumbled more than 5%.Manila plunged almost 25% after reopening following a two-day suspension prompted by the outbreak but it later bounced back to sit more than 13% down.
The US dollar hit a record high above 75 Indian rupees, while the New Zealand dollar and Russian ruble lost more than 5%.And AxiCorp’s Stephen Innes warned of further turmoil despite the historic moves by banks and governments. “Wartime economics is not going to help with everyone in lockdown sitting at home watching Netflix,” he said.
Australia’s central bank became the latest to move, slashing interest rates to a record low on Thursday and pledging to pump billions into the financial system.